On Wall Street Stocks Rebound, Oil at New Six-year Low

Nichole Harper
13 Jan, 2015
New York City

Stocks on Wall Street rebounded and dollar strengthened on the continuing slide in oil prices and earnings announcements pick up. Russian ruble dropped to a new low after crude oil futures declined to a near six-year low.

[R]12:45 PM New York – Stocks on Wall Street rebounded and dollar strengthened on the continuing slide in oil prices and earnings announcements pick up. Russian ruble dropped to a new low after crude oil futures declined to a near six-year low.[/R]

U.S. stocks gained after a two-day drop and earnings announcements picked up but oil price continued to slump and dropped to a new near six year low.

Market sentiment improved after investors speculated better-than-expected earnings from Apple Inc and weaker earnings in energy complex companies.

In overseas trading, China reported stronger-than-expected surge in December trade surplus of $49.5 billion on faster increase of exports compared to imports.

Ruble in Moscow trading dropped to a new low and fell to 65.73 against the dollar and 77.50 against the euro.

The fall in Russia’s ruble is linked to the sharp decline in oil prices in 2014 and the 20% drop so far in 2015.

Ruble may fall to 75 against the dollar if oil price continues to decline below $40 a barrel and central bank stays away from propping the currency. Central bank is likely to impose more stringent foreign exchange trading and capital transfer controls.

Russia’s economic contraction may deepen more than 5% estimated by the finance ministry.

On Wall Street trading, Tollbooth Strategy Index climbed 1.3% or 124.09 to 9,985.50.

S&P 500 index rose 16.90 or 0.8% to 2,045.17 and the Nasdaq Composite Index jumped 73.23 or 1.6% to 4,737.88.

U.S. Movers

Alcoa Inc ((AA)) slipped 1.3% or 21 cents to $15.96 after the aluminum producer reported revenues in the fourth-quarter ending in December climbed 14% to $6.4 billion from a year ago period.

Net in the quarter swung to profit $159 million or 11 cents a diluted share compared to a loss of $2.34 billion or $2.19 from the same quarter last year.

IHS Inc ((IHS)) climbed 5.9% to $6.51 to $116.64 after the professional information service provider said revenues in the fourth-quarter ending in November jumped 4% to $582 million from a year ago period.

Net income in the quarter soared 47% to $60.1 million or 87 cents a diluted share compared to $40.8 million or 60 cents from the same quarter last year.

KB Home ((KBH)) dropped 1.3% or 21 cents to $16.36 after the homebuilder stated total revenues in the fourth-quarter ending in November soared 29% to $796 million from a year ago period.

Net income in the quarter surged to $852.8 million or $8.36 a diluted share compared to $28.1 million or 31 cents from the same quarter last year.

The company said net income includes income tax benefit of $824.2 million that reflected the company''s $825.2 million deferred tax asset valuation allowance reversal.

European Markets

In London trading, FTSE 100 index gained 0.7% or 49.07 to 6,550.49 and in Frankfurt the DAX index climbed 1.9% or 181.26 to 9,963.16.

In Paris, CAC 40 index jumped 1.7% or 71.24 to 4,299.48.

Metro AG soared 6.4% to €27.20 after the Germany-based discount store chain operator reported sales in the first-quarter ending in the December fell 2.2% to €18.3 billion compared to €18.7 billion.

The company said sales from the cash & carry segment dropped 3.6% to €8.2 billion and sales in the Media-Saturn business climbed 4.1% to €6.9 billion.

Sika AG climbed 4.3% to 3,126 francs in the Switzerland-based specialty chemicals maker said sales in the fourth-quarter ending in December declined 5.1% compared to 17.8% surge in a year ago period.

Net sales in the year climbed 13% to 5.57 billion Swiss francs while operating result for the year forecasted to exceed 600 million Swiss francs.

The chemicals maker reported sales from the Asia/Pacific region surged 12.8% to 1 billion Swiss francs that is for the first time, as majority of the countries achieved double-digit sales growth.

Asian Markets

Nikkei index in Tokyo closed lower and the yen traded around 119 against one dollar. Japan reported better-than-expected current account balance, fifth monthly surplus in a row.

Aeon declined 6% after the supermarket operator reported 72% plunge in operating profit.

Market indexes in Tokyo eased and the yen traded below its three month average as investors focused on the fall in crude oil price.

The Ministry of Finance reported current account surplus in November declined to 433 billion from 833.4 billion yen surplus in October but reversing a deficit of 596.9 billion yen a year ago month.

The current account was in surplus for the fifth month in a row.

The trade balance was in deficit of 636.8 billion yen in the month compared to 766.6 billion yen deficit in the previous month.

Imports in the month jumped 2.2% to 6.959 trillion yen, lower from the 7.4% increase in October and exports in November surged 10.8% to 6.322 trillion yen, easing from the 11.2% surge in October.

Separately, the Bank of Japan announced bank lending in December rose 2.7% to 422.604 trillion yen easing from the 2.8% increase in November.

The Nikkei 225 Stock Average slipped 110.02 or 0.6% to 17,087.71 and the broader Topix index fell 5.89 to 1,374.69.

The yen strengthened to 119.30 against one dollar.

China’s exports in December increased 9.9% and imports gained 2.3% from a year ago month. The trade surplus in the month increased to US$49.5 billion.

In Mumbai trading, Sensex Index dropped 159.54 or 0.6% to close at 27,425.73. The CNX Nifty fell 23.60 or 0.3% to 8,299.40.

Investors showed growing interest in the seventh biennial investment summit organized in Gujarat.

Domestic and foreign corporations announced 21,000 new agreements primarily in energy and electricity distribution and manufacturing projects.

Investment commitment announced totaled to $400 billion or 25,000 abaj rupees, according to Gujarat Chief Minister Anandiben Patel.

The investment projects are spread over several years and may take as many as seven years to complete.

At the last summit held in 2013, a total of 12,000 abaj rupees of projects or $200 billion were announced and less than 2% of that amount has been invested in the state after two years.

Stocks in Mumbai gained for the second day in a row and the rupee jumped 1.6% after foreign investors stepped up exposure to Indian bonds.

Indian rupee strengthened to 62.14 against the U.S. dollar after global funds added net $26.4 billion of Indian government and corporate bonds.

IndusInd Bank slipped 1.1% to Rs 822.55 after the financial service provider said net in the third-quarter climbed 28.91% to Rs 447.19 crore.

Net revenue jumped 16.16% to Rs 3,047.70 crore.

Reliance Communications Limited dropped 1.9% to Rs 76.45 after the telecom operator secured a contract worth Rs 750 crore from the India-based UK-focused Vertex.