U.S. and World Markets Lack Direction, Euro at 11-Year Low

Nichole Harper
05 Mar, 2015
New York City

Stocks lacked direction in New York and the dollar edged higher. ECB President Draghi offered sovereign bond purchase plan details and also lifted growth and inflation targets. Crude oil and gold eased.

[R]12:50 PM New York – Stocks lacked direction in New York and the dollar edged higher. ECB President Draghi offered sovereign bond purchase plan details and also lifted growth and inflation targets. Crude oil and gold eased.[/R]

Stocks in New York lacked direction as the euro plunged to a low in more than 11 years and China lowered its estimate of economic growth to 7% from 7.5%.

The euro eased to $1.098 after the ECB President Mario Draghi lifted economic growth and inflation targets and released details of sovereign bond purchase program to revive growth across the euro zone.

Revised nonfarm business sector labor productivity decreased at 2.2% annual rate during the fourth-quarter. Output grew 2.6% and hours worked rose 4.9% in the quarter, the U.S. Department of Labor reported.

In a separate report the department said seasonally adjusted weekly jobless claims jumped 7,000 to 320,000 from the previous week unrevised claims of 313,000.

On Wall Street trading, Tollbooth Strategy Index gained 0.4% or 37.16 to 10,741.64.

S&P 500 index rose 3.65 or 0.2% to 2,102.09 and the Nasdaq Composite Index increased 18.51 or 0.4% to 4,985.88.

Crude oil fell 36 cents a barrel to $51.19 and gold fell 90 cents to $1,200 an ounce.

U.S. Movers

AbbVie Inc ((ABBV)) declined 3% or $1.82 to $58.46 after the drug maker agreed to acquire cancer biotech Pharmacyclics Inc and its flagship asset Imbruvica, effective treatment for hematologic malignancies for about $21 billion.

The tender offer is expected to close in mid-2015.

Shares of Pharmacyclics Inc surged 10.5% to $254.78.

Citigroup Inc ((C)) slid 20 cents to $53.47 after the financial service provider divested its stake of 10% in Turkey-based Akbank TAS for $1.2 billion at a loss.

Costco Wholesale Corporation ((COST)) jumped 2.8% or $4.10 to $151.27 after the discount store operator reported net sales in the fourth-quarter ending on February 15 jumped 4% to $26.87 billion form a year ago period. Comparable store sales in the quarter increased 2% and for the month of February comparable sales rose 1%.

Net income in the quarter surged 29.2% to $598 million or $1.35 per diluted share compared to $463 million or $1.05 from the same quarter last year.

The retailer said net sales in February climbed 4% to $8.18 billion from $7.90 billion a year ago period.

Kroger Co ((KR)) soared 4.9% or $3.41 to $73.06 after the convenience store operator reported total sales in the fourth-quarter ending in January climbed 8.5% to $25.2 billion form a year ago period. Comparable store sales in the quarter increased 2% and for the month of February comparable sales rose 1%.

Net income in the quarter rose 2.1% to $518 million or $1.04 per diluted share compared to $422 million or 81 cents from the same quarter last year.

European Markets

European market indexes traded higher after ECB President Mario Draghi lifted growth estimate for the next three years and said achieving inflation target is within reach.

European Central Bank now estimated consumer prices in the current year to remain unchanged and rise to 1.5% in 2016 and 1.8% in 2017.

The central bank also estimated gross domestic product to expand 1.5% this year and accelerate to 1.9% in 2016 and 2.1% in 2017.

In London trading, FTSE 100 index gained 0.5% or 37.78 to 6,957.02 and in Frankfurt the DAX index jumped 0.9% or 101.52 to 11,491.90.

In Paris, CAC 40 index climbed 1% or 51.15 to 4,968.50.

Market indexes in Turkey declined 2.5% after the lira fell for the seventh day in a row and touched record low after the government pressured central bank to lower interest rate. The lira declined 1.5% to 2.5996 against one dollar.

adidas AG climbed 3.6% to €71.47 after the Germany-based sports footwear, apparel and accessory maker reported sales in the year ending in December jumped 2.3% to €14.53 billion from €14.20 billion a year ago period.

Net profit in the year tumbled 37.6% from a year ago to €490 million compared to €787 million and diluted earnings per share declined 27.3% to €2.35 from €3.76.

At the end of the year, the group net debt was €185 million, representing a decrease of €479 million.

Carrefour SA jumped 2.7% to €30.46 after the France-based supermarket operator said total revenues in the year ending in December slid 0.5% to €76.32 billion from €76.68 billion a year ago period.

Net profit in the year rose 0.2% from a year ago to €1.37 billion compared to €1.36 billion and diluted earnings per share slumped to €2.35 from €3.76.

The retailer plans investments, including DIA France of between €2.5 billion and €2.6 billion in fiscal 2015.

Asian Markets

Stocks in Tokyo advanced after retreating for two days in a row and the Bank of Japan stepped up purchase of ETFs for the first time in three weeks. Pharmaceutical stocks were in focus for the second day on above average dividend yield.

Stocks in Tokyo traded higher after two days of selling and the Bank of Japan returned to stock market for additional purchase.

Stocks opened lower in Tokyo and indexes dropped as much as 0.3% but managed to recover in the afternoon trading after the Bank of Japan purchased exchange-traded-funds on Tuesday and Wednesday of at least 35.2 billion yen or $294 million. The news was first reported by Reuters.

The central bank returned to market and acquired funds for the first time in three weeks.

The Nikkei 225 Stock Average rose 48.24 or 0.3% to 18,751.84 and the broader Topix index increased 6.71 to 1,523.72.

The yen eased and closed at 120.15 against one dollar.

Pharmaceutical stocks jumped for the second day in a row on above-average dividend yield. The yield in the sector averages just under 2% compared to 1.38% in the Nikkei index.

Ono Pharmaceutical Co soared as much as 8% after its development partner Bristol Myers Squibb won a U.S. regulatory approval for its drug cancer Opdivo.

Stocks in Mumbai traded up in a volatile session as investors shift focus to corporate development and digest details of the financial budget released by the central government.

The Reserve Bank moved swiftly after the budget release and lowered reference rate as wholesale index in the last few months has been nearing zero. However, India leads Asia in consumer price inflation.

Indian rupee fell 9 paisa to 62.15 against one dollar.

The Sensex Index gained 68.22 to close at 29,448.95. The CNX Nifty added 15.10 to 8,937.75.

For the week, Sensex Index rose 0.8% and CNX Nifty jumped 1%.

Adani Power Limited climbed 4.9% to ₹59.35 after the power producer won the mining bid for Jitpur coal mine in Jharkhand for about ₹302 per ton.

JSW Steel fell 0.06% to ₹991.95 and the third largest steel maker won the mining right at Moitra coal mine in Jharkhand for ₹1,512 per ton.