U.S. Stocks Rebound, Pimco Funds Fall After Gross Moves to Janus

Nichole Harper
26 Sep, 2014
New York City

U.S. stocks rebounded a day after indexes dropped the most in three months. Bond market turned volatile after William Gross resigned from Pimco, the firm he helped to build. World markets traded volatile after commodities dropped to new multi-year lows.

[R]3:30 PM New York – U.S. stocks rebounded a day after indexes dropped the most in three months. Bond market turned volatile after William Gross resigned from Pimco, the firm he helped to build. World markets traded volatile after commodities dropped to new multi-year lows.[/R]

Market indexes advanced a day after posted their largest one-day declines in three months after the second quarter gross domestic product increase was revised higher.

Tollbooth Index rose 0.3% or 30.40 to 9,236.95.

S&P 500 index increased 5.52 to 1,971.56 and the Nasdaq Composite Index advanced 16.17 to 4,482.98.

Gross domestic product increased at an annual rate of 4.6% from the previous estimate of 4.2%, Commerce Department reported today.

U.S. Treasury bonds traded volatile and bond market face some volatility after widely followed bond manager William H. Gross resigned Pimco, the firm he helped to build.

Mr. Gross, 70, resigned the firm ahead of an official announcement from the firm and its Germany based insurer parent, Allianz SE.

Sources close to the company said that the Pimco was ready to fire Gross after the fund and the asset management company suffered withdrawals and the largest bond fund’s performance failed to beat most of its peers.

The questions about Mr. Gross’s management style has been circulating for months in the asset management industry and outflow of assets had accelerated in the last six months.

Pimco Total Return Fund has lost more than $60 billion in the year so far and continues to shrink according to research provided by TickerFunds.com. The fund, though still very large, has shrunk from the peak of $293 billion to $220 billion.

At least additional $20 billion of assets are expected to leave the firm after the Gross’ departure.

U.S. Movers

Janus Capital Group Inc soared 33% to $14.84 on thirty time the daily average volume after the company hired Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Co.

At Janus, Mr. Gross will manage recently started Unconstrained Bond Fund and strategies related to bond and multi-asset investing.

Micron Technology, Inc ((MU)) climbed 5.5% or $1.74 to $33.44 after the semiconductor devices maker stated revenue in the fourth-quarter ending on August 28 jumped 6% to $4.23 billion from a year ago period.

Net income in the quarter soared 42.7% to $1.15 million or 96 cents a diluted share compared to $806 million or 68 cents from a same quarter last year.

Nike Inc ((NIKE)) surged 10.8% or $8.62 to $88.37 after the sports footwear, apparel and accessories maker reported revenue in the first-quarter ending in August soared 15% to $8 billion from a year ago period.

Net income in the quarter surged 23% to $962 million or $1.09 a diluted share compared to $779 million or 86 cents from a same quarter last year.

European Markets

In London trading, FTSE 100 index edged up 0.05% or 3.61 to 6,643.32 and in Frankfurt the DAX index slipped 0.3% or 28.67 to 9,481.34.

In Paris, CAC 40 index jumped 0.7% or 28.62 to 4,383.90.

De La Rue Plc tumbled 32% to 516 pence after the U.K.-based currencies notes printer forecasted underlying operating profit and underlying pretax-profit for the year may drop by £20 million from a year ago.

The company added contractual price reductions and deteriorating trading conditions may drag earnings in the current and next year.

Asian Markets

Stocks in Tokyo closed lower after stocks traded ex-dividend and the Topix Index fell from a six-year high.

The Ministry of Internal Affairs and Communications said consumer prices excluding fresh food rose 3.1% in August from a year ago month after rising 3.3% in July.

Overall inflation was slowed to 3.3% from a year ago after rising 3.4% in the previous month.

The Nikkei 225 Stock Average slipped 144.28 or 0.9% to 16,229.86 and the broader Topix index dropped 14.48 or 1.1% to 1,331.95. For the week, Nikkei 225 jumped 1.8%.

The yen traded near 108.99 against one U.S. dollar.

Stocks in Mumbai trading gained after the rupee advanced 0.3% against the dollar and the U.S. based rating agency reiterated its view on the government debt and improved its outlook.

The rupee advanced 0.3% to 61.15 against one dollar and the Standard & Poor’s lifted its outlook on India’s credit rating to “stable” from “negative.”

The U.S. based agency generally holds critical views of emerging market debts and is far more lenient on the U.S. debt. The rating agency has also come under serious credibility issues after the housing market collapse in the U.S. that many believe was linked to the faulty rating on subprime lending by the agency.

The Sensex Index jumped 157.96 or 0.6% to close at 26,626.32 The CNX Nifty gained 57 to 7,968.85. For the week, Sensex dropped 1.7% and CNX Nifty declined 1.9%.