Oil Higher on Iraq Tensions, Modest Rise in Retail Sales

Nichole Harper
12 Jun, 2014
New York City

Iraq tensions and weak retail sales dragged market indexes in New York and in Europe. Oil futures rose to $105.89 a barrel and gold gained. U.S. retail sales in May rose less than expected and weekly jobless claims gained 4,000.

[R]12:30 PM New York – Iraq tensions and weak retail sales dragged market indexes in New York and in Europe. Oil futures rose to $105.89 a barrel and gold gained. U.S. retail sales in May rose less than expected and weekly jobless claims gained 4,000.[/R]

Stocks on Wall Street turned lower after oil price spiked and investors worried about the recent surge in indexes.

S&P 500 index declined 5.69 or 0.3% to 1,938.21 and the Nasdaq Composite Index fell 0.24% or 10.57 to 4,321.14.

Oil price for immediate month delivery increased $1.49 to $105.89 a barrel after Islamists rebels gained control of the second largest city in Iraq and raised the prospect of supply disruptions.

Retail Sales Rise 0.3%, Weekly Claims Gain

Retail sales in May increased 0.3% following a revised increase of 0.5% in April, the Commerce Department report showed today.

A separate from the U.S. Labor Department showed weekly jobless claims increased to 317,000 last week, but stayed below the 2014 average of 324,000.

European Markets

In London trading, FTSE 100 index slid 0.03% or 2.36 to 6,836.51 and in Frankfurt the DAX index slipped 0.2% or 23.59 to 9,926.22.

In Paris, CAC 40 index fell 0.1% or 6.78 to 4,548.33.

Hitachi agreed to participate with Mitsubishi and Siemens to bid for France based Alstom led by Siemens. Home Retail said sales at Argos and Homebase business climbed.

Lonmin surged after settling wage dispute at African mines. Mulberry profit plunged 54%. Volex said net loss in the year widened.

Asian Markets

Stocks in Tokyo dropped from a 4-month high and exporters led the decline and the yen held near its one-week average.

The Cabinet Office said seasonally adjusted core machine orders in April plunged 9.1% following surge of 19.1% in March. On a yearly basis, core machine orders jumped 17.6% from 16.1% increase in the last month.

The Nikkei 225 Stock Average slipped 95.95 or 0.6% to 14,973.53 and the broader Topix index slid 1.32 to 1,237.75.

The yen dropped and close at 102.07 against one U.S. dollar.

Takata Corp, the maker of air bags for Toyota, extended losses for the second day after defective air bags may need more fixes. Tokyo Dome quarterly net plunged 63%. Fanuc and Komatsu dropped on weak exporters.

The Sensex Index gained 102.32 or 0.4% to close at 25,576.21 The CNX Nifty rose 23.05 to 7,649.90.

Asian Paints completed acquisition of Ess Ess bathroom products. Essar plans to raise up to $600 million.

Infosys appointed Vishal Sikka as new CEO, the first outsider to lead the company. Jaiprakash Associates sold its Gujarat plant to UltraTech Cement.

U.S. Stock sin Review

Airlines and transportation stocks declined after violence flared up in second largest city in Iraq and oil prices spiked.

Islamists rebels gained control of Mosul, 80 miles away from Baghdad, and Iraqi government requested U.S. air support to combat rebels.

Lands’ End, Inc ((LE)) surged 10.5% or $2.79 to $29.42 after the accessories retailer reported revenues in the first-quarter ending on May 2 rose 3.6% to $330.5 million. The company reported its first quarterly result as an independent company after it was spun off from Sears Holdings.

Same-store sales in the quarter increased 3.4%.

Net income in the quarter soared 48.1% to $10.9 million or 34 cents a diluted share compared to $7.3 million or 23 cents.

Lululemon Athletica Inc ((LULU)) plunged 15% to $37.78 after the retailer of athletic-wear lowered its full-year earnings of no more than $1.76 a share from the previous estimate of $1.90 a share.

Restoration Hardware Holdings Inc ((RH)) soared 12.8% to $80.49 after the home accessories retailer revised higher earnings per share to $2.24 from the earlier estimate of $2.22. The retailer also lifted its revenues estimate in the year.