U.S. Stocks Advance on Earnings and Ahead of Fed Decision

Nichole Harper
29 Apr, 2014
New York City

U.S. stocks opened higher after consumer confidence index eased in April and metropolitan home price index was flat. Iron ore prices in China declined and dragged markets in Europe and Asia.

[R]10:15 AM New York – U.S. stocks opened higher after consumer confidence index eased in April and metropolitan home price index was flat. Iron ore prices in China declined and dragged markets in Europe and Asia.[/R]

Stocks on Wall Street opened higher and investors turned cautious after iron price decline extended to a 17% loss in the year so far in China and U.S.

U.S. Federal Reserve policy makers begin two-day meeting in Washington today and economists anticipate another cut in bond purchase program announcement at the conclusion of the meeting tomorrow.

S&P 500 index increased 0.5% or 10.20 to 1,879.61 and the Nasdaq Composite Index gained 0.6% or 26.70 to 4,101.18.

U.S. consumer confidence index declined to 82.3 in April from 83.9 in March, according to data tracked by Reuters and University of Michigan.

Controversial U. S. metropolitan home price index showed flat prices in February. The Case-Shiller index was nearly unchanged in February from January and increased 12.9% from a year ago month. The index gained 13.2% from a year ago month in January.

Home prices increased in San Diego, Portland, Seattle, Washington D.C. and Los Angeles.

Home prices in Las Vegas increased 23.1% from a year ago month in February.

European Bank Recapitalization Review

European Central Bank and European Banking Authority are planning a thorough review of 128 largest banks and results are likely to be published in October.

Banks will have between six and nine months to recapitalize.

ECB is conducting a backward looking review of loans and EBA is going to focus on the banks’ viability under various economic stress.

ECB Vice President Vitor Constancio said, “Banks should start to consider what private sources of capital could be raised as a result of this exercise and plan accordingly.”

World Markets

Iron ore prices on Monday fell 2.2% in Shanghai trading and import price of 62% iron ore fines in China’s Tianjin port closed at $108.60 per ton. Inventories at Chinese ports have surged to 25% totalling 110 million tons.

Also, nearly 40% of ore is used as a collateral for short-term financing and local reports in China suggested that banks raised the cost of financing for the purchase of ore.

Iron ore prices have plunged 17% in the year so far.

Australian dollar closed at 92.41 U.S. cents and stock market trading turnover climbed to 819 million shares worth $5.37 billion and the ASX index declined 0.9%.

U.S. Stocks in Review

Coach Inc ((COA)) dropped 8% to $46.22 after the luxury handbag retailer reported weaker than expected quarterly results.

Gogo Inc ((Gogo)) plunged 22% to $14.30 after AT&T said it will provide Internet access in airplanes.

Merck & Co., Inc ((MRK)) increased 2% to $57.85 after the second-largest U.S. drug maker reported adjusted first-quarter adjusted earnings of 88 cents a share and sales declined to $10.3 billion from $10.7 billion a year ago quarter.

Sprint Communications ((S)) increased 0.29 cents to $7.72 after the wireless carrier lifted its annual earnings estimate and said the company retained more than expected subscribers despite rising competition from AT&T and T-Mobile US Inc.

Yahoo! Inc ((YHOO)) increased 1% to $34.31 after the Internet portal plans to beef us video content and launch comedy shows and getting ready to offer new programming focused on TV personality Katie Couric.