U.S. Indexes Drop 0.5%, Rates in Europe on Hold

Nichole Harper
09 Jan, 2014
New York City

U.S. indexes declined on weak retailers and weekly jobless claims declined European Central Bank noted progress in the economic growth but left its reference rate at historic low of 0.5%. Yesterday, Bank of England left its lending rate unchanged.

[R]12:30 PM New York – U.S. indexes declined on weak retailers and weekly jobless claims declined European Central Bank noted progress in the economic growth but left its reference rate at historic low of 0.5%. Yesterday, Bank of England left its lending rate unchanged.[/R]

U.S. stocks eased and weak retailers and energy companies led the decline.

Weekly jobless claims in the last week declined 15,000 to 330,000, the Labor Department said in a report today.

Employers generally lay off temporary workers hired during holiday period and the weekly data are expected to be revised on above average volatility in the period.

S&P 500 index declined 3.27 to 1,834.22 and the Nasdaq Composite Index eased 14.49 to 4,151.12.

Alcoa is scheduled to release earnings after the close today and Bank of America, JP Morgan Chase and Goldman Sachs are scheduled to release earnings next week.

European Markets

European Central Bank left its main refinancing rate at 0.25% meeting the expectations of most economists.

The governing council stressed its accommodative stance “of monetary policy as long as necessary,” after its first meeting in the year in Frankfurt today.

ECB President Mario Draghi noted that the economic recovery has expanded from the export led industries to wider sectors but it is “premature to declare any victory.”

Yesterday, Bank of England kept its reference rate at a record-low 0.5% and left its bond purchase program unchanged at 375 billion pounds.

In London trading, FTSE 100 index edged up 0.03% or 2.16 to 6,724 and in Frankfurt the DAX index added 0.05% or 4.97 to 9,503.

In Paris, CAC 40 index fell 0.02% or 0.70 to 4,260.

U.S. Stocks in Review

Bed Bath & Beyond Inc ((BBBY)) plunged 12% or $9.72 to $69.96 after the home furnishings retailer missed earnings expectations.

Net sales in the third-quarter ending in November jumped 6% to $2.87 billion.

Net earnings in the quarter climbed 8.7% to $237.2 million and $1.12 per diluted share compared to $232.8 million or $1.03 per share.

Family Dollar Stores, Inc. ((FDO)) plunged 6.6% or $4.40 to $61.94 after the deep discount store chain said net sales in the first-quarter ending in November rose 3.2% to $2.5 million. Comparable store sales in the quarter decreased 2.8%.

Net income in the quarter decreased 3.1% to $78 million or 68 cents a diluted share compared to $80.3 billion or 69 cents.

Global Payments Inc ((GPN)) climbed 5.9% or $3.81 to $68.22 after the payment service provider said revenue in the second-quarter ending in November increased 8% to $588.5 million.

Net income in the quarter climbed 5.3% to $73.9 million and $1.02 per diluted share compared to $70.2 million or 89 cents per share.

The company expected diluted earnings per share for the year in the range of $4.03 to $4.10.