U.S. Investors Focus on Earnings as Greece Faces Deadline

Nichole Harper
19 Feb, 2015
New York City

U.S. stocks reversed earlier decline after earnings from Wal-Mart Stores, Priceline, Direct TV and Discovery Communications. High drama of Greek debt negotiations continued as finance ministers set a meeting on Friday to discuss the latest proposal.

[R]1:00 PM New York – U.S. stocks reversed earlier decline after earnings from Wal-Mart Stores, Priceline, Direct TV and Discovery Communications. High drama of Greek debt negotiations continued as finance ministers set a meeting on Friday to discuss the latest proposal.[/R]

Market indexes on Wall Street reversed morning decline and scaled higher as investors reviewed multi-billion dollar takeover offer from Ball Corp for can-maker Rexam and Greece’s debt talk high drama continued.

Seasonally adjusted weekly jobless claims declined 21,000 to 283,000 from the previous week revised claims of 304,000, the Department of Labor said today.

On Wall Street trading, Tollbooth Strategy Index gained 0.2% or 25.01 to 10,580.84.

S&P 500 index edged up 0.86 or 0.04% to 2,100.55 and the Nasdaq Composite Index rose 19.96 or 0.4% to 4,898.65.

Crude oil futures declined for the second day in a row and fell 77 cents to $51.37 a barrel.

U.S. Movers

Ball Corporation dropped 2.3% or $1.77 to $75.39 after the metal packaging product maker agree to acquire U.K.-based rival Rexam Plc for about $6.85 billion or £4.43 billion. The transaction values Rexam at 610 pence per share, represents a premium of 36%

Rexam shareholders will receive 407 pence in cash and 0.04568 in new shares of Ball Corp per share of Rexam, a total of 628 pence per share.

The transaction is expected to close in the first-half of 2016.

Priceline Group Inc ((PCLN)) surged 8.2% or $92.04 to $1,215.03 after the online travel company reported revenues in the fourth-quarter ending in December climbed 19.5% to $1.84 billion form a year ago period.

Net income in the quarter jumped 19.5% to $451.8 million or $8.56 per diluted share compared to $378.1 million or $7.14 from the same quarter last year.

Wal-Mart Stores, Inc ((WMT)) dropped 2.8% or $2.36 to $83.93 after the speciality retailer reported revenues in the fourth-quarter ending in December jumped 1.4% to $131.6 billion form a year ago period.

Net income in the quarter climbed 12.1% to $4.97 billion or $1.53 per diluted share compared to $4.35 billion or $1.36 from the same quarter last year.

The retailer said U.S. comparable store sales in the quarter rose 1.6% and at Sam''s Club without fuel increased 2%.

European Markets

Today Germany immediately rejected the loan extension proposal requested by Greece before the Friday’s deadline set by the Eurogroup of finance ministers.

Greece in a legal language 2-page letter requested a loan extension and reaffirmed its commitment to meet debt payment but for many fell short and did not go far enough on its promise to implement austerity measures and reform bureaucracy.

Greece is behind in it tax collection by at least one billion euros in January and the government is expected to run out of cash at the end of this month. Without the loan extension, Greece is likely to default on its international loans.

“The written document does not meet the criteria agreed in the Eurogroup on Monday,” German Finance Ministry spokesman Martin Jaeger said in a statement.

The Greek proposal calls for loan extension for six months but requests another set of “different terms,” Gavriil Sakellaridis, A Greek government spokesman said today.

In London trading, FTSE 100 index fell 0.2% or 10.79 to 6,887.29 and in Frankfurt the DAX index edged up 5.39 to 10,966.39.

In Paris, CAC 40 index gained 0.3% or 15.45 to 4,814.48.

Deutsche Boerse AG jumped 1.2% to €69.90 after the German stock exchange operator reported net revenues in the fourth-quarter soared 15.1% to €544.5 million, up from €473 million a year ago period.

Net profit in the quarter climbed 79.8% from a year ago to €224 million compared to €124.6 million and diluted earnings per share advanced to €1.21 from €0.68.

Deutsche Börse forecasted net revenue in fiscal 2015 to grow between €2.1 and €2.3 billion.

The board of the exchange operator proposed stable dividend of €2.10 per share from a year ago period.

Nestle SA increased 0.8% to 71.70 Swiss francs after the Switzerland-based food and beverage maker reported sales in the year ending in December fell 0.6% to 91.61 billion francs from 92.16 billion francs a year ago period.

Profit in the year surged 42.7% from a year ago to 14.90 billion francs compared to 10.44 billion francs and diluted earnings per share climbed to 4.52 francs from 3.13 francs.

For fiscal 2015, Nestle forecasted organic growth of 5% and margins and underlying earnings per share in constant currencies.

Asian Markets

The benchmark index in Tokyo closed at a high not seen since 2000 after a catch up rally in large banks powered the latest market advance. Trend Micro soared 6% after the anti-virus software maker estimated higher than expected profit.

Stocks in Tokyo continued to advance higher and trade deficit in January narrowed after oil prices declined and exports surged at the fastest pace in the month in more than a year.

Large banks led the gainers and Sony advanced after the company forecasted increase in operating earnings and announced a plan to separate its sound and video business.

Trade deficit in January narrowed 57.9% to 1.18 trillion yen from 2.780 trillion yen a year ago month, the Ministry of Finance said today.

The department added exports in the month climbed 17% to 6.14 trillion yen from 5.25 trillion yen a year ago month while import plunged 9% to 7.32 trillion yen compared to 8.05 trillion yen in January 2014.

The Nikkei 225 Stock Average gained 65.62 or 0.4% to 18,264.79 and the broader Topix index rose to 12.26 to 1,494.93.

The yen weakened to 118.74 against one dollar.

Market indexes remained volatile in the Mumbai trading but in late afternoon averages turned higher and closed up for the seventh day in a row.

Resource and commodities focused companies led the gainers after Greece formally requested loan extension as expected calming the tensions in the euro zone for now.

Indian rupee rose 18 paisa to 62.34 against one dollar.

The Sensex Index gained 142.01 or 0.5% to close at 29,462.27. The CNX Nifty added 26.20 or 0.3% to 8,895.30.

Ambuja Cements Ltd slipped 1.8% to ₹264.55 after the cement maker said net in the fourth-quarter increased 3.81% to ₹328.59 crore.

Net sales gained 7.91% to ₹2,477.22 crore.