U.S. Indexes Rest Near Highs, Pfizer and Best Buy in Focus

Nichole Harper
30 Apr, 2013
New York City

Stocks in early trading traded sideways ahead of Fed statement tomorrow and weak earnings from Pfizer. Best Buy agreed to sell its stake in European joint venture to UK based Carphone Warehouse for $775 million. European unemployment rate hit a record high.

[R]9:35 AM New York – Stocks in early trading traded sideways ahead of Fed statement tomorrow and weak earnings from Pfizer. Best Buy agreed to sell its stake in European joint venture to UK based Carphone Warehouse for $775 million. European unemployment rate hit a record high.[/R]

U.S. stocks were little changed at the opening after weak earnings from Pfizer and investors focused on central bank actions in the U.S. and in Europe.

European Central Bank is expected cut rate as much as 50 basis points on Thursday after weak employment report.

Federal Reserve is also scheduled to release its policy statement on Wednesday after a 2-day meeting.

In the U.S. economic data, the employment cost index for the first quarter increased 0.3% from the fourth quarter, according to the data released by the government.

The controversial Case-Shiller metropolitan index of 20 largest cities increased 9.3% in February from a year earlier month.

European Markets

European markets were little changed after the latest batch of mixed earnings and annual inflation in the euro zone declined and unemployment rate jumped.

In London trading, FTSE 100 index declined 0.1% to 6,452 and in Frankfurt the DAX index increased 0.6% to 7,922. In Paris trading, CAC 40 index fell 0.1% to 3,864.

Euro zone inflation rate declined to a three-year low according to the latest data available from the eurostat based in Luxembourg.

The annual inflation rate fell to 1.2% in April from 1.7% in March, below the target set by the European Central Bank.

Separately, the statistics agency said March jobless rate increased to 12.1% in the currency union, record high since the data series began in 1995.

Unemployed people increased 62,000 to 19.2 million in March and in the largest economy in the region, Germany, jobless rate held at 5.4%. Spanish unemployment rate surged to 26.7%, highest since 1976 and youth unemployment soared to 55.9%.

Asian Markets

Asian markets rallied and several indexes in the region closed at record highs and investors hopes that central banks in the U.S. and Europe will continue to provide stimulus to their economies.

The Jakarta Composite Index increased 0.7% to a record high of 5,034 and Malaysia’s index reached a record high of 1,717.65 on a sustained flow from foreign investors.

Malaysian Stock Exchange reported a net foreign buying of $1.55 billion in the month so far.

Market indexes in India advanced 0.6% after Unilever Plc offered to increase its stake in the locally listed Indian subsidiary to 75% in a $5.4 billion deal or Rs 600 a share.

Stocks in Review

Best Buy agreed to sell its 50% stake in European business of UK based Carphone Warehouse to the company in cash valued at $775 million.

Express Scripts increased 1% after the discount drug prescription processor reported first quarter sales of $26.06 billion and lifted its 2013 earnings estimate to a range of $4.20 to $4.30 a share.

Legg Mason Inc plunged 6% after the money management company replaced its chief executive and said fiscal first quarter net plunged 62% on the sustained withdrawals from its mutual funds.

Other asset management firms Invesco and Franklin Resources Inc are scheduled to release earnings after the close today.

McGraw-Hill Cos increased 1% after the publisher and the owner of the troubled rating agency Standard & Poor’s reported higher than expected sales and earnings.

Masco Corp dropped 4% after the insulation maker reported first-quarter adjusted earnings of 13 cents a share, lower than at least 14 cents a share from several analysts.

Newmont Mining fell 2% after the metals and mining company said first-quarter net income declined to $315 million from $490 million or 63 cents a share from 97 cents a share.

Pfizer declined 3% after the drug maker reported first-quarter earnings of 54 cents a share, lower than expected by analysts. The company also lowered its full-year 2013 estimate to a range between $2.14 and $2.24 a share.