Stocks Power Ahead on Wall Street, Third Monthly Decline in Retail Sales

Nichole Harper
12 Mar, 2015
New York City

Stocks on Wall Street rebounded and initial claims of weekly jobless claims declined below 300,000. Retail sales declined for the third month in a row on bad weather and cautious consumer spending. The dollar declined after the sustained rise against the euro.

[R]1:55 PM New York – Stocks on Wall Street rebounded and initial claims of weekly jobless claims declined below 300,000. Retail sales declined for the third month in a row on bad weather and cautious consumer spending. The dollar declined after the sustained rise against the euro.[/R]

U.S. stocks traded higher and reversed losses of last three sessions and the dollar declined against the euro.

Banks and financial companies led the charge after Morgan Stanley, American Express and Citigroup announced dividend payments and share buyback program after the latest stress test and permission from the U.S. Federal Reserve.

Initial jobless claims declined in the previous week, according to the data released by the Labor Department.

Seasonally adjusted weekly jobless claims jumped 36,000 to 289,000 from the previous week unrevised claims of 325,000, the department reported today.

In a separate report, the department said February import price index increased 0.4% after declines of 3.1% in January and 2.5% in December.

Retail sales in February adjusted for seasonality and calendar declined 0.6% to $437 billion from January but increased 1.7% from a year ago month, the Department of Commerce announced today.

On Wall Street trading, Tollbooth Strategy Index climbed 1.1% or 113.16 to 10,566.18.

S&P 500 index jumped 19.77 or 0.9% to 2,060.14 and the Nasdaq Composite Index gained 29.49 or 0.6% to 4,879.85.

Crude oil gained 70 cents a barrel to $57.09 and gold declined $9 to $1,151.10 an ounce.

U.S. Movers

Children’s Place Inc ((PLCE)) surged 8% or $4.62 to $62.65 after the children''s specialty apparel retailer said net sales in the fourth-quarter ending in January increased 2.5% to $479.2 million form a year ago period.

Comparable store sales in the quarter climbed 3.7%.

Net income in the quarter jumped 8.3% to $17 million or 79 cents per diluted share compared to $15.7 million or 69 cents from the same quarter last year.

Dollar General Corp ((DG)) climbed 2.9% or $2.09 to $73.54 after the discount retailer reported net sales in the fourth-quarter ending in December climbed 9.9% to $4.94 billion from a year ago period.

Same-store sales in the quarter jumped 4.9%.

Net income in the quarter declined 10.2% to $355 million or $1.17 per diluted share compared to $322 million or $1.01 from the same quarter last year.

The company forecasted total sales for the year to increase between 8% and 9% and same-store sales to jump in the range of 3% to 3.5% and diluted earnings per share between $3.85 and $3.95.

Men''s Wearhouse Inc ((MW)) climbed 8.1% or $3.90 to $51.94 after the specialty retailer said net sales in the fourth-quarter ending in January jumped 65.6% to $928.4 million form a year ago period.

Comparable store sales in the quarter soared 6.8%.

Net loss in the quarter widened to $35.9 million or 75 cents per diluted share compared to $30.5 million or 64 cents from the same quarter last year.

European Markets

Bayerische Motoren Werke AG slipped 1.5% to €117.60 after the Germany-based automobile maker reported group revenues in the year ending in December climbed 5.7% to €80.40 billion from €76.06 billion a year ago period.

Net profit in the year soared 9.2% from a year ago to €5.82 billion compared to €5.33 billion and diluted earnings per share increased to €8.83 from €8.08.

ITV Plc gained 1.5% to 250.70 pence after the U.K.-based broadcasting company agreed to acquire Netherlands-based Talpa Media B.V., the entertainment show producer for about €1.1 billion or £781 million.

The transaction is expected to close during the second quarter of this year.

Deutsche Lufthansa AG declined 2.6% to €13.09 after the Germany-based airline company reported total group revenues in the year ending in December slid 0.1% to €30.01 billion from €30.03 billion a year ago period.

Net profit in the year tumbled 82.4% from a year ago to €55 million compared to €313 million and diluted earnings per share increased to €0.12 from €0.68.

TSB Banking Group Plc surged 26.1% to 333.06 pence after the retail bank received preliminary offer from the Spain-based lender Banco de Sabadell for $2.6 billion or 340 pence in cash per share.

Asian Markets

Nikkei in Japan jumped the most in a month and the index surged to a 15-year high. Toyota Motor surged more than 1% on the expectations that the company may agree to larger than usual wage increase for workers.

Stocks in Tokyo closed higher as investors prepared to settle futures contracts and the yen extended losses to a new six-year low.

The Nikkei index gained the most in a month and closed at a 15-year high and domestic reports suggested that Toyota is likely to agree to pay increase for employees.

Toyota jumped more than 1.2% after the Nikkei News reported that the company is likely to accept the demand for monthly worker wage increase by 3,700 yen in addition to automatic increase in annual wages.

The Toyota Motor Workers’ Union has asked for 6,000 yen increase in monthly wages. If Toyota follows through with the most generous wage increase, several other auto workers are expected to follow, helping Abe government to meet its consumer spending target.

The Nikkei 225 Stock Average climbed 267.59 or 1.4% to 18,991.11 and the broader Topix index jumped 20.96 to 1,546.63.

The yen eased and extended losses to 121.17 against a dollar.

Stocks in Mumbai rebounded after falling for three days in a row on the expectations of a faster economic growth.

Economy is expected to accelerate to 7.2% in the current fiscal year ending in March and pick more speed to 7.5% in the next financial year ending in March 2016, according to the latest estimate released by the International Monetary Fund.

India’s economy is expected to expand at the fastest rate among 20 largest economies in the world, surpassing the elevated growth rates of more than 7% in China for a decade.

The Washington based agency highlighted the improving confidence and lower oil prices are likely to support economic revival in the country.

The report also noted that the decline in gold imports and a better management of balance pf payments position is expected to improve India’s ability to withstand external economic shocks.

India is expected to add nearly 100 million or 10 crore people to its labor force in the next ten years. Modi government is looking to improve its investment in power plants and infrastructure to speed the economic reforms but the newly government is facing challenges from the opposition controlled Rajya Sabha.

Indian rupee fell 25 paisa to 62.52 against one dollar.

The Sensex Index jumped 271.24 or 0.9% to close at 28,930.41. The CNX Nifty advanced 76.05 or 0.9% to 8,776.

In currency market, the euro continued to slide against the U.S. dollar and declined to below $1.05, a 12-year low since January 2003.

ICICI Bank Limited rose 1.6% to ₹338.10 after the largest private sector bank is in talks to sell its stake of 5% in ICICI Prudential Life Insurance to Temasek Holdings Pte and Carmignac Gestion worth $300 million.