U.S. Indexes and Consumer Confidence Fall

Nichole Harper
26 Jul, 2013
New York City

U.S. indexes drifted lower on weaker than expected earnings and a weakness in auto sector dragged market sentiment in Europe. SAC Capital pleaded not guilty to criminal charges and Halliburton agreed to pay maximum statutory fine and also made a voluntary contribution of $55 million.

[R]1:45 PM New York – U.S. indexes drifted lower on weaker than expected earnings and a weakness in auto sector dragged market sentiment in Europe. SAC Capital pleaded not guilty to criminal charges and Halliburton agreed to pay maximum statutory fine and also made a voluntary contribution of $55 million.[/R]

U.S. stocks traded lower and consumer confidence unexpectedly increased in July to a six-year high. Market indexes were under pressure after weaker than expected earnings from Newmont Mining Corp and Expedia Inc.

The index of consumer sentiment increased to 85.1 in July from revised 84.1 in June.

The S&P 500 index decreased 0.25% and the Nasdaq Composite Index eased 0.01% and the narrow index of 30 large companies Dow Jones fell 0.64%.

SAC Capital, one of the largest hedge funds pleaded not guilty to criminal charges levied by the Manhattan Attorney General’s office.

Halliburton Co agreed to plead guilty to destroying evidence linked to 2010 Gulf of Mexico oil spill, the Justice Department said.

The company pleaded third time for the charges linked to the spill and agreed to pay a maximum fine of $200,000 and made a separate voluntary payment of $55 million to the National Fish and Wildlife Foundation.

European Markets

Market indexes in Paris jumped 0.3% and Zurich declined 0.9% and in London FTSE 100 index decreased 0.5%.

European markets declined for the second day after automaker led the decliners and LMH reported better than expected earnings.

LVMH increased 4% after the maker of luxury goods said organic revenues increased 9% in the second quarter.

Deutsche Boerse AG declined 4% after the operator of Frankfurt stock exchange said second-quarter net income declined 8% and guided lower than estimated earnings in the second half.

Pearson Plc soared 7% after the publisher of Financial Times

Vivendi SA agreed to sell its majority stake in game company Activision Blizzard for $8.17 billion.

Asian Markets

Market indexes in Tokyo dropped 2.9% and declined more than 3% in the week as investors booked profit ahead of corporate earnings announcements.

Nomura reported a surge in profit after trading commissions and asset management fees soared after the Japanese government and central bank placed new policies in place to revive the economy from a 2-decade inflation.

Toyota and its subsidiaries sold 2.48 million vehicles in the quarter ending in June and in the six months decreased 1.2% to 4.91 million units. Volkswagen in the same period sold 4.7 million units and General Motors sold 4.85 million vehicles.

Samsung Electronics Co said it will invest $18 billion in its memory chip and display businesses in the current fiscal year. Net income, excluding minority interest, increased 50% to 7.58 trillion won. Samsung stock declined 0.9% after the release of earnings in Seoul trading today.

Sales in second quarter were 57.7 trillion won and operating profit increased to 9.53 trillion won and mobile phone unit that represents nearly two-thirds of earnings reported operating profit of 6.28 trillion won.

Samsung said it shipped 76 million smartphones in the quarter and earlier the company said it sold S4 in the first two months about 10 million units.

The market index in Seoul increased 0.06% and in Mumbai rupee strengthened after Reserve Bank of India took additional steps to trim the volatility in the currency.

U.S. Stocks in Review

Activision Blizzard Inc soared 14% after the company agreed to acquire a majority stake controlled by parent Vivendi SA for $8.2 billion.

Cliff Natural Resources Inc soared 7% after the largest iron ore miner reported 82 cents a share and reported sales ahead of expectations.

Expedia ((EXPE)) plummeted 25% after the online travel agency reported second-quarter earnings excluding some items of 64 cents a share, lower than 80 cents estimated by several analysts.

Newmont Mining ((NEM)) decreased 3% after the second-largest gold miner reported unexpected loss after the company took a write-down on the Australian gold inventories after the prices plunged in the last three months.

Starbucks ((SBUX)) surged after the largest coffee chain operator reported third quarter earnings of 55 cents a share and lifted its earnings outlook for fiscal 2013.

Tesla Motors Inc increased 3% after Deutsche Bank analyst forecasted the stock could more than double in the next three to four years.

Zynga ((ZNGA)) dropped 17% after the online game company estimated third quarter sales and earnings that was below analysts’ expectations. The company also abandoned plans to enter online gambling business.