U.S. Stocks Turn Higher, Apple Shines on Earnings

Nichole Harper
28 Jan, 2015
New York City

Stocks on Wall Street traded sideways ahead of Fed decision on interest rate and oil prices extended weekly and losses in the year so far. European markets traded lower after market indexes in Athens plunged 9% and banks extended weekly losses to 44%.

[R]12:35 PM New York – Stocks on Wall Street traded sideways ahead of Fed decision on interest rate and oil prices extended weekly and losses in the year so far. European markets traded lower after market indexes in Athens plunged 9% and banks extended weekly losses to 44%.[/R]

Stocks on Wall Street traded sideways and investors focused on oil futures and European markets.

Oil futures of immediate month for West Texas Intermediate Crude declined 2.2% to $45.25. Stocks in energy complex declined as much as 2% after oil and natural gas prices retreated.

European markets fluctuated in a tight range but market indexes in Greece declined for the third day in a row.

The ASE Index in Athens dropped for the third day in a row and plunged 9% and banks extended losses in the week of 44%.

Greek investors stayed away from stocks and bonds and capital flight from banks accelerated on the worries that the newly elected Greek government will push for roll back of austerity measures with international lenders and raised the prospect of another credit crunch in the struggling nation of 12 million people.

Yield on 10-year Greek bonds increased 268 basis points to 16.71% and credit default swaps suggested 70% probability that the government may not pay its debt obligation in the next five years.

On Wall Street trading, Tollbooth Strategy Index gained 0.4% or 42.61 to 10,078.26.

S&P 500 index added 5.30 or 0.3% to 2,034.85 and the Nasdaq Composite Index rose 11.71 or 0.2% to 4,693.20.

In addition, Russian bond yields rose 12 basis points to 15.39% and the dollar-denominated RTS stock market index declined 1.1% and ruble regained 1.1% after plunging 6.6% in Monday’s trading.

S&P, the U.S. based rating agency downgraded Russian government debt to BB+ with “negative” outlook, the first downgrade since April.

Oil prices traded near its six-year low despite OPEC chief commenting that price could surge above $100 a barrel without new investment in production.

West Texas Intermediate for March delivery increased 74 cents to $45.89 and gold rose $15.10 to $1.294.50 an ounce. Copper declined 3% to 245.45 cents and silver gained 4 cents to $18.12.

U.S. Movers

Apple Inc ((AAPL)) surged 7.2% or $7.85 to $116.86 after the mobile device maker reported net sales in the first-quarter ending in December soared 29.5% to $74.60 billion a year ago period.

Net income in the quarter surged 37.9% to $18.02 billion or $3.06 a diluted share compared to $13.07 billion or $2.07 from the same quarter last year.

During the quarter Apple sold 74.5 million iPhone devices and iPhone revenues jumped 57% to $51.2 billion from a year ago. iPad unit sales declined 18% to 21.4 million.

The company said sales in the Americas region soared 23% and revenues in Europe climbed 20% and sales from Greater China surged to 70%.

Apple forecasted revenues for the second-quarter between $52 billion and $55 billion and gross margin in the range of 38.5% to 39.5%.

Yahoo! Inc ((YHOO)) gained 1.8% or 88 cents to $48.89 after the search engine service provider said revenues in the fourth-quarter ending in December rose 0.8% to $1.26 billion a year ago period.

Net income in the quarter climbed 109.4% to $348.2 million or 33 cents a diluted share compared to $166.3 million or 17 cents from the same quarter last year.

The company forecasted first-quarter revenues between $1.02 billion and $1.06 billion.

Yahoo said it would spin off its remaining Alibaba stake in a tax-free deal, having 384 million shares valued $40 billion.

Chief executive officer Marissa Mayer said ""post-spin, using the closing price for Alibaba as of January 26, we will have returned nearly $50 billion of value to our shareholders"".

The deal is expected to close in the fourth-quarter of 2015.

European Markets

Antofagasta production of gold and copper in fourth-quarter climbed. Hennes & Mauritz net surged 12%. Johnson Matthey sales jumped 5% to £745 million. STMicroelectronics net swung to profit.

In London trading, FTSE 100 index slid 2.93 to 6,808.68 and in Frankfurt the DAX index gained 0.8% or 83.12 to 10,711.70.

In Paris, CAC 40 index fell 0.06% or 2.75 to 4,621.46.

H & M Hennes & Mauritz AB slipped 0.9% to 335.50 kronor after the Sweden-based branded apparel maker reported net sales in the fourth-quarter ending in December climbed 16.8% to 42.64 billion kronor from 36.50 billion kronor a year ago period.

Net profit in the quarter surged 12.1% from a year ago to 6.22 billion kronor compared to 5.55 billion kronor and earnings per share jumped to 3.76 kronor from 3.35 kronor.

STMicroelectronics NV dropped 2.6% to €7.16 after the Switzerland-based semiconductor product maker said revenue in the fourth quarter ending in December declined 9.4% to $1.83 billion.

Net in the quarter swung to profit from a year go to $43 million compared to a loss of $36 million and diluted loss per share swung to a 5 cents from diluted earnings per share of 4 cents.

The company forecasted gross profit margin for the first-quarter to decline about 33.2% from 33.8% in the fourth-quarter.

Asian Markets

Stocks in Tokyo extended gains and Topix closed at a seven-week high and yen eased a little. Chugai Pharmaceutical said annual sales increased 8.8%. FujiFilm net in nine-month period surged. Hitachi Construction Machinery and Komatsu reported weakening earnings.

Stocks in Tokyo extended gains and Topix closed at a seven week high after better than expected earnings from industrial and export focused companies.

The Nikkei 225 Stock Average rose 27.43 to 17,795.73 and the broader Topix index added 3.54 to 1,429.92.

The yen eased to close at 118.04 against one dollar.

The BSE Sensex and CNX Nifty advanced for the sixth day in a row before closing down after investors took profit and awaited rate decision from the U.S. Federal Reserve.

Indian rupee closed at 61.41 against one dollar.

The Sensex Index fell 11.86 to close at 29,559.18. The CNX Nifty added 3.80 to 8,914.30.

Aban Offshore Limited gained 3.4% to ₹497.20 after the oil field service provider reported net in the third-quarter surged 61.9% to ₹129.98 crore.

Total Revenues rose 0.95% to ₹1,016.45 crore.

Adani Ports and Special Economic Zone Limited dropped 1.4% to ₹339.85 after the port developer said net in the third-quarter advanced 13.66% to ₹512.08 crore.

Net sales climbed 37.62% to ₹1,701.13 crore.

Ranbaxy Laboratories Limited advanced 1% to ₹699.75 after the generic pharmaceuticals maker reported net loss in the third-quarter widened to ₹1,029.72 crore compared to ₹158.94 crore for the same period last year.

Net revenues slipped 10.23% to ₹2,629.52 crore.