Stocks on Wall Street Advance Ahead of Earnings Season

Nichole Harper
07 Jan, 2014
New York City

Stocks on Wall Street advanced after falling for three days in a row and the dollar gained against the Canadian dollar and the euro. U.S. trade deficit declined to a 4-year low and the Canadian trade deficit widened. German unemployment dropped and the euro-area inflation slowed.

[R]3:25 PM New York – Stocks on Wall Street advanced after falling for three days in a row and the dollar gained against the Canadian dollar and the euro. U.S. trade deficit declined to a 4-year low and the Canadian trade deficit widened. German unemployment dropped and the euro-area inflation slowed.[/R]

Stocks on Wall Street advanced reversing a 3-day sell-off and commodities also traded higher.

S&P 500 index increased 0.6% or 11.58 to 1,838.35 and the Nasdaq Composite Index added 1% or 40.37 to 4,154.06.

U.S. indexes advanced in a broad rally led by the gains in healthcare and technology stocks.

Investors are looking ahead to the minutes of Fed meeting scheduled to release tomorrow and jobs report on Friday.

On the earnings front, Alcoa is scheduled to release earnings on Thursday and kick-off earnings season.

Canadian dollar declined to $1.073 after trade deficit widened to C$940 million on the rising imports of machinery, Statistics Canada said today in Ottawa.

Canada’s dollar fell to the lowest in three years since May 2010.

Imports increased 0.1% to C$40.7 billion and exports were nearly unchanged at C$39.8 billion in November.

European Markets

German unemployment rate was essentially unchanged at 6.9%, Federal Labor Agency said today in Nuremberg.

In a separate report, Germany’s retail sales increased 1.5% in November, Federal Statistics Office in Wiesbaden said today. Sales in the month increased 1.6% from a year ago month.

Total number of people out of work in the largest economy in Europe were 2.965 million and declined 15,000 in December.

Euro-area inflation slowed to 0.8% in December form 0.9% in the prior month, Eurostat in Luxembourg said today.

In London trading, FTSE 100 index increased 0.5% or 31.37 to 6,762 and in Frankfurt DAX index jumped 0.6% or 59.15 to 9,487.

In Paris, CAC 40 index gained 0.4% or 16.64 to 4,244.

U.S. Trade Deficit Declines to 4-Year Low

U.S. trade deficit declined to the lowest since fall 2009 on falling petroleum imports and rising exports in November.

The Commerce Department said total merchandise and services deficit in the month declined to $34.3 billion from the revised $39.3 billion in October after adjusting for seasonal factors.

Exports of goods and services increased 1% to $194.9 billion and imports declined 1.5% to $229.1 billion in November from $232.5 billion in October.

Petroleum goods imports dropped 11% to $28.5 billion and U.S. exports of energy products increased 5.5% to $13.3 billion.

For the eleven months to November last year, goods and services trade deficit decreased 12% from a year ago to $435.1 billion. Total U.S. exports in the period increased 3% to $2.08 trillion and imports were nearly flat at $2.51 trillion.

U.S. trade gap in the period with China increased 1% to $293.9 billion and with the European Union gained 4% to $121.4 billion and with Saudi Arabia and OPEC nations totaled $64.1 billion.

U.S. Stocks in Review

Convergys Corp ((CVG)) gained 7.7% to $22.47 after the call center operator said it agreed to acquire Stream Global Services Inc for $820 million.

Netflix Inc ((NFLX)) dropped 6% to $337.67 after Morgan Stanley lowered its view on the company stock and said competition in the digital video streaming services market is expected to rise.

PBF Energy Inc fell 5.3% to $28.30 after the oil refiner said in a statement funds affiliated with First Reserve Management LP and Blackstone Group LP plan to sell 15 million shares.

Palo Alto Networks Inc ((PANW)) climbed 3.6% or $2.06 to $59.43 after the network security platform provider agreed to acquire Morta Security, Internet security system developer. The companies did not disclosed terms of the deal.

Synergy Resources Corporation ((SYRG)) soared 4.9% or 42 cents to $9 after the oil and gas explorer said revenue in the first-quarter ending in November climbed 132% to $19.3 million.

Net income in the quarter soared 173% to $6.1 million or 8 cents per diluted share compared to $2.2 million or 4 cents per share.

Sonic Corporation ((SONC)) surged 7.3% or $1.401 to $20.65 after the fast-food restaurants chain operator said total revenue in the first-quarter ending in the November was nearly flat at $126.7 million. System-wide same-store sales for the quarter increased 2.2%.

Net income in the quarter jumped 34.4% to $8.2 million or 14 cents per diluted share compared to $6.1 million or 11 cents per share.

Tenet Healthcare Corp ((THC)) increased 4% to $45.74 and HCA Holdings Inc ((HCA)) gained 2.4% to $49.68 on positive comments from Credit Suisse analyst.