U.S. Industrial Production Drops, Alobaba Lifts IPO Price Range

Nichole Harper
15 Sep, 2014
New York City

Stocks on Wall Street extended previous week losses after industrial production declined in August. Microsoft agreed to acquire game developer Mojang AB for $2.5 billion. Cognizant agreed to acquire healthcare IT services provider Trizetto for $2.7 billion.

[R]12:05 PM New York – Stocks on Wall Street extended previous week losses after industrial production declined in August. Microsoft agreed to acquire game developer Mojang AB for $2.5 billion. Cognizant agreed to acquire healthcare IT services provider Trizetto for $2.7 billion.[/R]

Stocks on Wall Street opened lower after the OECD lowered its global and U.S. economic outlook for the year and China’ industrial production declined unexpectedly in August.

The U.S. economic growth is expected to slow to 2.1% from the previous estimate of 2.16% in May, according to the Organization for Economic Cooperation and Development.

Growth in the 18-member Eurozone was estimated to slow to 0.8% from the previous estimate of 1.2% in May. And, the growth in Japan is expected to slow to 0.9% from the previous estimate of 1.2%.

However, the growth expectations in fast developing countries are uneven. India is expected to grow faster at 5.7% from the previous estimate of 4.9% and growth in China is estimated flat from the previous estimate of 7.4% but Brazil is expected to barely grow at 0.3%.

S&P 500 index declined 0.2% or 4.06 to 1,981.46 and the Nasdaq Composite Index dropped 1.05% or 48.39 to 4,518.67.

Separately, industrial production in August declined 0.1% after rising 0.2% in the previous month, Federal Reserve reported today in Washington. The production declined in August after auto production slowed form a sharp jump in July.

Another report issued by Federal Reserve Bank of New York showed manufacturing expanded September and at the fastest pace since October 2009.

The so called Empire State Index increased to 27.5 from 14.7 in August, and any reading above zero indicates growth.

U.S. Movers

Alibaba, China based ecommerce platform operator has expanded its public offering size, according to sources close to the company.

The China based ecommerce platform operator is expected to increase its top end of the offering price to $70 a share from $66.

The company is likely to raise as much as $24 billion after the revised price and at the original price range was valued at $163 billion.

European Markets

Sweden based game developer Mojang AB agreed to a $2.5 billion deal and the founder is expected to leave the company and focus on other “web experiments.”

The Stockholm developer of popular game Minecraft generated revenues of 2 billion crowns and operating profit of 896 million crowns of $126 million in 2013.

The company game was the most popular paid game both on Apple’s iPhone and Google’s Android platforms.

In London trading, FTSE 100 index slid 0.1% or 7.86 to 6,799.10 and in Frankfurt the DAX index edged up 0.08% or 7.27 to 9,658.40.

In Paris, CAC 40 index fell 0.3% or 13.84 to 4,427.86.

Asian Markets

Markets in Japan were closed to observe Respect for the Aged Day but indexes in Shanghai and Hong Kong declined closed to 1% after weaker than expected growth in industrial production in August.

The seasonally adjusted industrial production in August increased 6.9% from a year ago, down from 9% in July and the weakest growth since December 2008. The data were released by the National Bureau of Statistics.

The latest weakness in the Chinese data added to the weakening economic back drop with the declining real estate investment and falling retail sales. China is likely to miss its annual economic growth target of 7.5%.

Separately, domestic new vehicle sales in August declined 1.8% 3.5% from a year ago, Australian Bureau of Statistics reported today.

Australian dollar traded at 89.97 U.S. cents and in stock trading turnover jumped to 742 million shares worth $4.64 billion.

ASX 200 index slipped 57.60 or 1% to 5,473.50 and the broader All Ordinaries index dropped 56.90 to 5,475.40.