World and U.S. Market Indexes Drop 1%

Nichole Harper
23 Jan, 2014
New York City

World and U.S. market indexes declined after China

[R]1:05 PM New York – World and U.S. market indexes declined after China’s manufacturing growth declined in a private survey. U.S. existing home sales increase slowed to 1% in December and median home prices rose 9.9%. Weekly jobless claims fell 1,000 in last week.[/R]

Stocks in New York declined following weakness in world markets after China was deemed to face a contraction in manufacturing.

World markets were on the defensive led by more than 1.5% loss in Hong Kong and European markets decline of 1% after China’s manufacturing was estimated to have contracted in January according to a private survey.

China’s Manufacturing Growth Slows

A preliminary private survey in China suggested a contraction in manufacturing sector.

The Purchasing Manager’s Index declined to 49.6 in January from 50.5 in December, tracked by HSBC and Markit.

The government estimate of manufacturing industry growth is scheduled two weeks from today and the government survey is based on a larger sample of companies and is heavily weighted in state controlled enterprises.

Chinese government has been engineering economic slowdown for the last two years and China confirmed on Monday that the economic growth has slowed to a 14-year low in the final quarter of 2013, still healthy growth rate above 7%.

Weekly Jobless Claims Fall

U.S. weekly jobless claims declined 1,000 to 326,000 in the period ending on January 18, the Labor Department said today.

U.S. Home Sales Increase Moderate

Also, U.S. home sales in December increased 1% in January to a 4.87 million annual rate, the National Association of Realtors said in Washington today.

Sales would have been higher because bad weather in the Northeast and in Midwest restrained demand last month.

The industry association also said a total of 5.09 million existing homes were also sold in 2013 compared to 4.66 million homes in 2012, the largest unit sales since 2006.

First time buyers accounted for 27% of all sales in December, the lowest since 2008 in the last ten years and when the average was near 40%.

Median price of existing homes increased 9.9% to $198,000 in December and for 2013 median price increased 11.5% to $197,100.

S&P 500 index declined 17.66 or 0.96% to 1,827.20 and the Nasdaq Composite Index fell 37.58 or 0.9% to 4,205.42.

European Markets

In London trading, FTSE 100 index slipped 0.8% or 53.1 to 6,773.96 and in Frankfurt the DAX index dropped 0.9% or 89.14 to 9,631.27.

In Paris, CAC 40 index slumped 1% or 44.03 to 4,281.45.

U.S. Stocks in Review

Baxter International Inc ((BAX)) rose 52 cents to $70.26 after the diversified healthcare company said net sales in the fourth-quarter ending in December climbed 16% to $4.37 billion.

Net income in the quarter plunged 34% to $326 million or 59 cents a diluted share compared to $494 million or 89 cents.

For the first quarter, the company expects sales growth in the range of 13% to 14%.

Baxter expects sales growth in 2014 between 9% and 10% and diluted earnings per share in the range of $4.80 to $5.00.

eBay Inc. ((EBAY)) gained 18 cents to $54.60 after the online marketplace service provider said total revenues in the fourth-quarter ending in December jumped 13% to $4.5 billion.

Net income in the quarter climbed 13% to $850 million or 65 cents a diluted share compared to $751 million or 57 cents.

Johnson Controls, Inc. ((JCI)) declined 4.1% or $2.09 to $49.47 after the automotive parts maker reported net sales in the first-quarter ending in December advanced 5% to $10.9 billion.

Net earnings in the quarter surged 30% to $505 million or 69 cents a diluted share compared to $389 million or 52 cents.

Lockheed Martin Corporation ((LMT)) slipped 2% or $3.20 to $154.04 after the aerospace company stated net sales in the fourth-quarter ending in December dropped 5% to $11.5 billion.

Net earnings in the quarter declined 14% to $488 million or $1.50 a diluted share compared to $569 million or $1.73.

McDonald''s Corporation ((MCD)) gained 38 cents to $95.25 after the restaurants operator reported revenue in the fourth-quarter ending in December rose 2% to $7.09 billion.

Net income in the quarter grew 1% to $1.40 billion or $1.40 a diluted share compared to $1.39 billion or $1.38.

U.S., comparable sales in the fourth quarter decreased 1.4% and comparable sales in Europe rose 1%. Global comparable sales decrease of 0.1%.

Union Pacific Corporation ((UNP)) jumped 3.1% or $5.24 to $173.64 after the railroad services provider stated total revenue in the fourth-quarter ending in December jumped 7% to $5.63 billion.

Net income in the quarter climbed 13% to $1.17 billion or $2.55 a diluted share compared to $1.04 billion or $2.19.