U.S. Stocks Rally on Tech Stocks, Deals and Easing Tensions in Europe

Nichole Harper
12 Feb, 2015
New York City

Stocks surged ahead and Nasdaq flirted with record high after earnings empower market rally on Wall Street. Easing Ukraine and Greece related tensions in Europe also supported market advance. U.S. dollar gained as retail sales fell and weekly jobless claims rose.

[R]12:40 PM New York – Stocks surged ahead and Nasdaq flirted with record high after earnings empower market rally on Wall Street. Easing Ukraine and Greece related tensions in Europe also supported market advance. U.S. dollar gained as retail sales fell and weekly jobless claims rose.[/R]

Stocks in New York accelerate gains as market indexes flirt with records.

Investors stepped up increase market exposure after tensions in Europe eased and ministers in the euro zone averted a confrontation with Greece and resolved to meet again in a week to strike an agreement.

Domestic earnings, easing tensions in the euro zone and weakening outlook for oil prices empowered stock rally in New York.

Seasonally adjusted weekly new jobless claims increased 25,000 to 304,000 from the previous week revised claims of 279,000, the Department of Labor said today.

Retail sales adjusted for seasonality and calendar declined 0.8% to $439.8 billion from December but climbed 3.3% from a year ago month, announced the Department of Commerce.

Sales at gasoline stations and apparel retail stores fell on declines in prices.

In a separate report, the same department reported that inventories at the end of December rose 0.1% from November to $1,764.4 billion and climbed 3.9% from a year ago.

Sales declined 0.9% to $1,331.2 billion in December but jumped 0.9% from a year ago.

On Wall Street trading, Tollbooth Strategy Index jumped 1% or 102.15 to 10,435.12.

S&P 500 index climbed 14.36 or 0.7% to 2,082.84 and the Nasdaq Composite Index increased 40.44 or 0.8% to 4,841.77.

U.S. Movers

Expedia Inc ((EXPE)) surged 15.4% or $12.02 to $90.20 after the online-travel booking service provider agreed to acquire rival online travel company Orbitz Worldwide Inc. for $12 per share in cash, including brands CheapTickets, ebookers and HotelClub for about $1.38 billion.

Kellogg Company ((K)) declined 3.5% or $2.29 to $64.01 after the ready-to-eat cereal and convenience food maker reported net sales in the fourth-quarter ending in December edged up 0.3% to $3.51 billion from a year ago period.

Net in the quarter swung to a loss of $293 million or 82 cents per diluted share compared to profit of $818 million or $2.24 from the same quarter last year.

European Markets

European markets traded higher after finance chiefs in the euro zone and Greece fail to sign a deal but appear to get closer to a compromise and avert confrontation.

Finance ministers agreed to postpone the decision after a meeting of political leaders this week in Brussels.

In addition, leaders of Germany and France and Russia and Ukraine agree on cease fire deal but how long the agreement will last is a suspect.

In London trading, FTSE 100 index rose 0.3% or 22.18 to 6,840.35 and in Frankfurt the DAX index climbed 1.8% or 191.20 to 10,943.31.

In Paris, CAC 40 index jumped 1.3% or 59.84 to 4,739.22.

Sweden lowered its benchmark rate to negative 0.1% and also said it begin government bond purchase program.

Sweden will join Denmark and Switzerland to impose negative rate ahead of European Central Bank plan to purchase €60 billion of bonds a month from the next month.

Sweden is a member of the European Union but it is not in the euro zone.

Rio Tinto Plc climbed 3.2% to 3066.32 pence after the U.K.-based second largest iron ore and resource company reported group revenues in the year ending in December declined 6.8% to US$47.66 billion from US$51.17 billion a year ago period.

Net profit in the year surged 78.4% to US$6.53 billion compared to $3.66 billion and diluted earnings per share climbed to 351.2 cents from 197.3 cents in the same period a year ago.

Separately, the mining company plans to conduct buy-back tender under proposed US$2 billion capital return program and repurchase A$500 million of shares.

Rio Tinto said net debt at the end of year decreased to US$12.5 billion from US$18.1 billion in December 2013 while adjusted total borrowings at December 2014 were US$24.9 billion.

Total S.A gained 1.1% to €23.31 after the France-based oil and gas producer said sales in the fourth-quarter ending in December plunged 19% to $52.51 billion from $64.98 billion a year ago period.

Net in the quarter swung to a loss from a year ago to $5.66 billion compared to profit of $2.23 billion.

The oil and gas producer said hydrocarbon production in the quarter dropped 2% to 2.23 million barrels of oil equivalent per day compared to same period a year ago.

The company announced quarterly dividend of €0.61 per share and annual dividend of €2.44 per share, a growth of 2.5% from a year ago period.

Asian Markets

Weaker yen, rising earnings and a growing stock buyback announcement lifted Nikkei to the highest level in 7 ½ years.

Core machine orders in December climbed 8.3% compared to 1.3% gain in November and for the year soared 11.4%. Asahi, Dentsu, Kirin, Marui and Rakuten reported rising earnings.

Stocks in Tokyo surged a day after holiday after the yen dropped to 120-level and machinery orders surged at a rate double than expected.

Investors ignored the Greece negotiations and focused on the rising earnings from domestic companies. Also, weaker yen and rising number of companies announcing stock buyback also supported strong market advance.

The Nikkei index closed at the highest level since July 2007.

Producer price index in January dropped 1.3% to 103.3 from the revised 0.5% decrease in December, the Bank of Japan said today.

On a yearly basis, prices added 0.3% following the revised 1.8% gain in the previous month.

The bank added export prices in the month slipped 1% from previous month and 3% from a year ago month while import prices declined 3.4% in month and 9.1% from a year ago month.

Core machine orders in December climbed 8.3% to 853.6 billion yen compared to 1.3% gain in November, the Cabinet Office reported today.

Manufacturing orders in December surged 24.1% to 396.9 billion yen and non-manufacturing orders climbed 7.2% to 477.0 billion yen.

For the fourth quarter, core machine orders edged up by 0.4% to 2.42 trillion yen and for the year jumped to 4%.

On a yearly basis, core machine orders surged 11.4% following the 14.6% decline in the previous month.

For the first quarter of 2015, core machine orders are forecasted to increase 1.5% on quarter but drop 0.9% on year to 2.46 trillion yen.

The Nikkei 225 Stock Average climbed 327.04 or 1.9% to 17,979.72 and the broader Topix index jumped 21.67 to 1,449.39.

The yen advanced to 120.36 against one dollar.

Stocks in Mumbai closed higher and after the close the statistics agency showed factory output growth slowed and retail inflation accelerated in January.

Market indexes advanced and industrials, capital goods makers and technology companies led the gainers.

Factory output increase slowed to 1.7% in December after rising at 3.9% in the previous month when the new economic data calculation was implemented.

Retail inflation, measured based on 2011 year base, in January increased 5.11% after rising at 5% in December based on the previous calculation method. Food prices rose at 6.06% in the month after rising at 4.78% in December.

The government agency estimated economic growth of 7.4% in the fiscal year ending in March, according to the new market price based economic data calculation.

Indian rupee rose 20 paisa to 61.31 against one dollar.

The Sensex Index climbed 271.13 or 0.9% to close at 28,805.10. The CNX Nifty gained 84.15 or 0.9% to 8,711.55.

Bank of India declined 5.8% to ₹227.65 after the financial service provider said net in the third-quarter plummeted 70.40% to ₹173.38 crore.

Total revenues advanced 9.95% to ₹11,947.45 crore.

Net non-performing assets in the bank advanced 2.50% compared 1.75% in the same period last year.

Power Grid Corporation of India Limited advanced 3.1% to ₹150.35 after the power transmission company said net in the third-quarter gained 17.9% to ₹1,228.91 crore.

Net revenues advanced 18.1% to ₹4,486.11 crore.

Reliance Capital Ltd gained 5.2% to ₹468.75 after the financial service provider reported net in the third-quarter climbed 28% to ₹213 crore.

Total revenues jumped 12% to ₹2,102 crore.