Auto Sales and Factory Orders Lift U.S. Growth Outlook

Nichole Harper
03 Sep, 2014
New York City

Stocks in New York and in Europe traded higher after Russia and Ukraine sought to end violence. The apparent agreement is expected to find a political settlement with the leaders of eastern Ukraine and end violence. U.S. auto sales surged led by 20% sales increase at Chrysler.

[R]11:45 PM New York – Stocks in New York and in Europe traded higher after Russia and Ukraine sought to end violence. The apparent agreement is expected to find a political settlement with the leaders of eastern Ukraine and end violence. U.S. auto sales surged led by 20% sales increase at Chrysler.[/R]

Stocks on Wall Street opened higher after Ukraine and Russia appeared to nearing a agreement that will cease armed activities in Eastern Ukraine.

S&P 500 index increased 4.26 to 2,006.55 and the Nasdaq Composite Index dropped 4.79 to 4,593.39.

New orders for manufactured goods in July jumped a record 10.5% on a surge in transportation equipment demand. June orders were revised higher to 1.5% from the previous estimate of 1.1% increase, the Commerce Department said today.

Orders excluding volatile transportation category declined 0.8% in July following a 1.4% increase in the prior month.

Last week the government agency reported durable goods orders increased 22.6% in July and orders excluding transportation declined revised 0.7%.

U.S. Auto Sales Jump in August

U.S. auto sales in August month were estimated at seasonally adjusted 17.4 million annual units and monthly sales are estimated to surpass 1.5 million units.

General Motors said August sales declined 1.2% but truck sales jumped 18% and big commercial vans also were popular.

GM also added average price was record high at $33,750, an increase of $500 from July and a surge of $2,900 from a year ago month.

Ford auto sales increased 0.4%, the best August month in eight years and Escape SUV and Fusion reported best August month sales ever.

Chrysler sales increased 20% driven by 11% sales surge for the Town & Country minivan. Sales of 200 sedan soared 39% in July and gained 7% in the month and the company said August month sales were a mix of close-out sales of 2014 and the new model of 2015.

Nissan sales increased 11.5% to 134,388 units, the best August month sales ever. Hyundai said August month sales were the second-best month ever.

Volkswagen said August month sales declined 12.8% to 35,181. The German automaker has been struggling with sales and its ageing lineup of models are increasingly losing market share to revamped Chrysler and resurgent Asian makers.

U.S. Movers

CVS Caremark Corp ((CVS)) increased 0.6% to $80.20 after the pharmaceutical products retailer stopped selling tobacco products from today. The retailer also said it is planning to change its name to CVS Health to “reflect its broader health care commitment.”

Coupons.com Inc ((COUP)) plunged 10.6% to $14.56 after the online coupon retailer reported wider than estimated loss.

The stock fell below the IPO price of $16 a share in March. The stock has declined 51% from the high of $30.17 in June.

Groupon Inc dropped 13% and RetailMeNot Inc plunged 29% after two companies reported lower than expected sales.

Home Depot, Inc ((HD)) declined 0.6% to $90.62 after the home renovation retailer reported a possible payment data breach. The retailer is working with law enforcement agencies and banks to determine the extent and nature of the breach.

European Markets

European markets traded higher after Ukraine and Russia appear to be heading for a cease fire agreement. The news was unexpected and still viewed with caution as NATO leaders are gathering for a two-day summit in Wales, UK.

In London trading, FTSE 100 index gained 0.9% or 60.95 to 6,890.12 and in Frankfurt the DAX index climbed 1.4% or 129.77 to 9,636.79.

In Paris, CAC 40 index jumped 1.1% or 48.12 to 4,426.45.

Hermes International SCA declined 4.8% to €250.18 after the France-based luxury-goods maker signed an agreement with LVMH Moet Hennessy Louis Vuitton SA to settle the four-year dispute that worth about €5.7 billion or $7.5 billion.

Under the terms, LVMH or its holding companies will not acquire shares of Hermes in the next five years.

According to the terms, the shareholders of LVMH will get one share in Hermes for every 21 shares of LVMH.

Asian Markets

Market indexes in Tokyo closed to a seven-month high and the yen weakened to an eight-month low on the rising expectations of U.S. economic growth after the latest manufacturing data was ahead of expectations.

The Nikkei index increased for the third day in a row and lifted the index to the level last seen in January.

The Nikkei 225 Stock Average increased 59.75 or 0.4% to 15,728.35 and the broader Topix index rose 4.52 to 1,301.52.

The yen declined to close at 104.94 against one U.S. dollar.

Indexes advanced on the expectations of cabinet shakeup and Prime Minister Shinzo Abe is expected to announce the appointment of Yasuhisa Shiozaki as the minister of labour, health and welfare.

China’s service sector expanded at the fastest pace in 17 months in August after a sharp slowdown in July, according to a private survey conducted by HSBC and Markit.

The index jumped to 54.1 in August from a nine-year low of 50 in July.

Official service sector index reported by China in August increased to 54.4 from a six-month low in July of 54.2.

In Mumbai trading, the Sensex Index gained 120.55 or 0.4% to close at 27,139.94 The CNX Nifty increased 31.55 to 8,114.60.

NMDC Limited jumped 2.5% to Rs 178.85 after the company said total iron ore production climbed 11.7% to 12.10 million tons in the five months to August and sales during the same period surged 18.6% to 13.57 million tons.