Stocks on Wall Street Ease on Rate Hike Worries, Barclays in Focus

Nichole Harper
26 Jun, 2014
New York City

Stocks on the Wall Street traded lower and a top policy maker at the Federal Reserve estimated interest rates to rise in 2015. Leading brokerage firms are severing ties with dark pool managed by Barclays after fraud allegation by the New York State. Frank Russell agreed to a $2.7 billion deal.

[R]12:45 PM New York – Stocks on the Wall Street traded lower and a top policy maker at the Federal Reserve estimated interest rates to rise in 2015. Leading brokerage firms are severing ties with dark pool managed by Barclays after fraud allegation by the New York State. Frank Russell agreed to be acquired for $2.7 billion.[/R]

U.S. stocks traded lower for the third time in four days and technology and resource stocks led the decliners and deal news dominated.

S&P 500 index declined 0.4% to 1,950.83 and the Nasdaq Composite Index decreased 18.47 or 0.4% to 4,361.34.

Action camera maker GoPro priced its initial public offering at $24 a share and raised $427 million. The stock shot up as high as $32.

The wildly popular action camera maker sold 3.8 million Hero HD cameras in 2013 and controlled 45% of camcorder market in the U.S., according to a regulatory filing with the SEC.

GoPro revenues in 2013 soared to $1 billion in 2013 from $526 million in 2012 and earnings increased to $60 million in 2013 from $32 million in 2012.

However, the company’ revenues may have peaked and revenues in the first quarter of 2014 declined 7% from the quarter a year ago. Quarterly profits also fell in the comparable period.

European Markets

In London trading, FTSE 100 index slid 0.2% or 12.26 to 6,721.36 and in Frankfurt the DAX index fell 0.8% or 78.45 to 9,789.30.

In Paris, CAC 40 index slipped 0.8% or 35.12 to 4,425.48.

Barclays Plc plunged 8.5% to 210.50 pence after the U.K.-based bank is facing civil lawsuit from New York State alleging that the bank falsified its marketing material regarding dark pool trading operations and misled investors.

London Stock Exchange Group Plc climbed 5.9% to 1,981 pence after the U.K.-based trading services provider agreed to acquire the U.S.-based asset manager Frank Russell Co., a unit of Northwestern Mutual Life Insurance Co. for $2.7 billion.

Asian Markets

Stocks in Tokyo closed higher on the speculation that the world’s largest economy is recovering from the fall in the first quarter.

The U.S. GDP shrinkage was revised to 2.9% in the second revision on weaker than estimated exports and fall in consumer spending driven by a decline in healthcare spending.

However, home sales are rebounding at the fastest pace in two years in May and consumer confidence has increase in the last two months.

The Nikkei 225 Stock Average gained 41.88 or 0.3% to 15,308.49 and the broader Topix index edged up 2.60 to 1,263.43.

The yen dropped to close at 101.76 against one U.S. dollar.

The Sensex Index dropped 251.07 or 1% to close at 25,062.67 The CNX Nifty slipped 76.05 to 7,493.20.

Crompton Greaves in a consortium won €150 million project in the Netherlands. Essel Propack acquired its subsidiary EP Lamitubes. L&T acquired 74% stake in Thales Software India.

Reliance Communications controlled by billionaire Anil Ambani raised about $500 million to finance the maturing debt. The wireless carrier also raised $217 million from selling warrants to promoters of the company.

U.S. Stocks in Review

Alcoa Inc ((AA)) jumped 2.4% or 35 cents to $14.90 after the aluminum producer agreed to acquire Firth Rixson, aerospace parts maker for $2.85 billion in cash and stock from private equity firm Oak Hill Capital Partners.

Accenture Plc ((ACN)) slipped 1.5% or $1.24 to $81.79 after the outsourcing service provider reported total revenues in the net revenue in the third-quarter ending in May jumped 7% to $8.24 billion.

Net income in the quarter climbed 10.6% to $817.3 million or $1.26 a diluted share compared to $810.3 million or $1.21.

Bed Bath & Beyond Inc ((BBBY)) plunged 8.9% or $5.47 to $56.50 after the home furnishings company said net sales in the first-quarter ending in May rose 1.7% to $2.66 billion. Comparable store sales in the quarter edged up to 0.4%.

Net earnings in the quarter dropped 7.6% to $187.1 million compared to $202.5 million and diluted earnings per share were flat at 93 cents from a year ago.

ConAgra Foods Inc ((CAG)) rose 5 cents to $28.78 after the packaged food company reported total sales in the fourth-quarter ending on May 25 fell 2.8% to $4.44 billion.

Net in the quarter swung to a loss of $324.2 million or 77 cents a diluted share compared to profit of $192.2 million or 45 cents.