U.S. Indexes Extend Weekly Rise, Rakuten to Buy Viber for $900 Million

Nichole Harper
14 Feb, 2014
New York City

U.S. stocks advanced and investors views the latest economic data with caution as inclement weather affects economic activities. Industrial output in January unexpectedly declined 0.8% and U.S. consumer confidence was better than expected this month. Rakuten to pay $900 million for Viber Media.

[R]2:25 PM New York – U.S. stocks advanced and investors views the latest economic data with caution as inclement weather affects economic activities across the nation. Industrial output in January unexpectedly declined 0.8% and U.S. consumer confidence was better than expected this month. Rakuten acquires Viber Media for $900 million.[/R]

U.S. stocks extended gains as investors digested economic data with a caution and inclement weather in much of the nation impacted transportation and operating of federal government, schools and retail trade.

S&P 500 index increased 0.5% or 8.7 to 1,838.56 and the Nasdaq Composite Index added 4.4 or 0.1% to 4,254.03.

Industrial output in January unexpectedly declined 0.8%, the largest decline since May 2009, following revised 0.3% increase in the previous month.

U.S. consumer confidence rose more than expected in February, according to a preliminary index tracked by Thomson Reuters and University Michigan.

The index held at 81.2 this month.

In world markets, India reported wholesale inflation in January declined to an 8-month low and industrial production shrank 0.6% in December. Economists are still estimating India to report economic growth in the current fiscal year ending in March at 4.9%, an increase from 4.5% in fiscal 2013 when growth dropped to a ten year low.

Argentina adjusted its inflation data reflecting international standards and meeting the demands of IMF and Paris Club donors.

The government reported January inflation rate of 3.7% after under stating the inflation for seven years in a row.

The sharp increase in inflation was widely anticipated but the clear reporting positively surprised markets and investors.

Argentina had reported annual inflation of 10.9% in 2013 compared to 28% inflation rate estimated by several private economists.

Governments around the world understate inflation in the economy, including persistent inflation data underreporting in the U.S.

Rakuten Inc, the Japanese online retailer agreed to acquire Viber Media, Internet messaging and calling service for $900 million. Viber has 225 million members in 193 countries.

The company is looking to expand its sales from Japan to overseas and has led number investments in smaller enterprises in Europe and the U.S.

European Markets

Stocks reacted to earnings and economic news in the euro zone region. The economy in the region advanced at a faster than expected pace led by Germany and France.

Gross domestic product in the euro area increase increased 0.3% in the final quarter in 2013 following 0.1% rise in third quarter. The data was released by the statistics office in Luxembourg.

In London trading FTSE 100 index increased 0.1% or 4.2 to 6,664 and in Frankfurt the DAX index added 0.7% or 65.6 to 9,662.

In Paris trading, CAC 40 index increased 0.6% or 27.3 to 4,340.

In Italy, FTSE MIB increased 1.6% to a high not seen since 2011 after Prime Minister Enrico Letta resigned and pave the path for a new government that may be led by Matteo Renzi.

38 years old Renzi, if elected as prime minister, will be the youngest prime minister in the history of Italy.

U.S. Stocks in Review

Agilent Technologies Inc plunged 7% to $55.91 after the company lowered its annual adjusted earnings per share estimate to between $2.96 and $3.16 from the previous outlook of $3.03 to $3.33.

Campbell Soup Co gained 4% to $42.62 after the food processor reported second quarter adjusted earnings of 76 cents per share and the company reaffirmed its full-year estimates. The company also said its U.S. sales increased 5%.

Cliff Natural Resources Inc. increased 6% to $23.15 after the second largest U.S. iron ore miner reported earnings ahead of analysts’ expectations. The company also appointed former president and chief operating officer Gary Halverson as chief executive.

GNC Holdings Inc. tumbled 13% to $45.72 after the vitamins supplement retailer reported quarterly earnings and sales that missed analysts’ estimate. The retailer also estimated adjusted earnings per share between $3.18 and $3.24.

The Men’s Warehouse, Inc ((MW)) 4.5% to $44.41 plunged after the retailer’s merger target Jos. A. Bank said it has agreed to buy Eddie Bauer outdoors clothing business for an enterprise value of $825 million.

Jos. A. Bank Clothiers Inc. declined 0.5% to $54.64.

Occidental Petroleum Corporation ((OXY)) increased 3.6% to $95.56 after the oil explorer said it will spin-off its California operations and focus on assets that are more profitable. The company has also sold off assets in other locations including its oil wells in Persian Gulf.

Weight Watchers International, Inc ((WTW)) plunged 26% to $22.48 and dropped to a lowest level since 2009 after the diet food company reported fourth-quarter adjusted earnings per share of 58 cents, lower than expected 60 cents a share. The company also guided annual earnings per share between $1.30 and $1.60.