U.S. Stocks Struggle, Inflation Picks Up on Higher Oil Price

Nichole Harper
24 Mar, 2015
New York City

Stocks on Wall Street lacked direction as investors assessed the latest read on consumer prices, corporate earnings and diverging growth data from the euro zone and China. The dollar remained firm against the euro and the yen as manufacturing index dropped to an 11-month low in China.

[R]1:05 PM New York – Stocks on Wall Street lacked direction as investors assessed the latest read on consumer prices, corporate earnings and diverging growth data from the euro zone and China. The dollar remained firm against the euro and the yen as manufacturing index dropped to an 11-month low in China.[/R]

Stocks on Wall Street lacked direction and market indexes hugged flat line as the euro rebounded and a private survey in China suggested slowing growth in manufacturing.

The inflation measure reported by the U.S. government showed consumer prices rose in February for the first time in four months after gasoline prices at pump stations rebounded modestly.

The index of consumer prices increased 0.2% in February from January. For the year all item index before seasonal adjustment unchanged, the Department of Labor said today.

Gasoline prices rose 2.4% in February after falling 18.7% in January and rose for the first time since June.

Food prices rose 0.2% after remaining unchanged in January and broad energy prices rose 1% in the month after falling 9.7% in the previous month.

Seasonally adjusted new home sales in February soared 7.8% to 539,000 from the revised January rate of 500,000 and surged 24.8% from a year ago month to 432,000, the Department of Commerce reported.

On Wall Street trading, Tollbooth Strategy Index increased 0.6% or 62.84 to 10,644.18.

S&P 500 index slid 4.70 or 0.2% to 2,099.73 and the Nasdaq Composite Index edged up 4.15 or 0.08% to 5,015.24.

Crude oil fell 10 cents a barrel to $47.35 and gold jumped $2.40 to $1,190.10 an ounce.

U.S. Movers

McCormick & Company, Inc ((MKC)) soared 4.4% or $3.27 to $76.47 after the spice maker reported revenues in the first-quarter ending in February jumped 2% to $1.01 billion from a year ago period.

Net income in the quarter tumbled 14.5% to $70.5 million or 55 cents per diluted share compared to $82.5 million or 62 cents from the same quarter last year.

McCormick forecasted adjusted earnings per share in the range of $3.44 to $3.51 and sales to rise between 4% and 6%.

Ocwen Financial Corp ((OCN)) dropped 2.6% or 23 cents to $8.57 after the financial services provider agreed to sell mortgage servicing rights on an additional $25 billion of loans to a subsidiary of Nationstar Mortgage Holdings Inc.

Ocwen’s residential mortgage servicing rights portfolio consists of about 142,000 loans held by Freddie Mac and Fannie Mae with a total principal balance of about $25 billion.

The transaction is expected to close before mid-year.

European Markets

European markets traded higher after a composite index tracking activities in manufacturing surged to a four-year high of 54.1 in March.

The survey among 19 euro zone member nations showed growing activities and may offer early sign of the impact of the European Central Bank’s bond purchase program.

In London trading, FTSE 100 index rose 0.2% or 14.47 to 7,052.14 and in Frankfurt the DAX index gained 0.7% or 86.12 to 11,981.96.

In Paris, CAC 40 index increased 0.6% or 32.38 to 5,086.90.

H & M Hennes & Mauritz AB plummeted 3.2% to 342.20 kronor after the Sweden-based apparel retailer said net sales in the first-quarter ending in February soared 25.3% to 40.28 billion kronor from 32.14 billion kronor in a year ago period.

Net profit in the quarter surged 36.2% from a year ago to 3.61 billion kronor compared to 2.65 billion kronor and earnings per share jumped to 2.18 kronor from 1.60 kronor.

Wolseley Plc declined 4.2% to 4,034 pence after the Switzerland-based plumbing, heating and building materials distributor reported total revenues in the first-half ending in January climbed 8.9% to £6.44 billion from £5.91 billion in a year ago period.

Net in the period swung to a loss from a year ago to £58 million compared to profit if £229 million and diluted earnings per share swung to a loss of 4.6 pence from profit of 83.4 pence.

Asian Markets

Stocks in Tokyo eased after investors booked profit following 5% rally in Nikkei this month. For the year so far, the benchmark index has jumped 13%.

Japan revises corporate governance code and listed companies are now required to have at least two independent directors.

Stocks in Tokyo closed lower after investors took an advantage of the recent market rally to book profit.

Nikkei index in March has jumped 5% and in the year so far has advanced 13%.

The Nikkei 225 Stock Average fell 40.91 or 0.2% to 19,713.45 and the broader Topix index slid 4.66 to 1,587.59.

The yen closed at 119.43 against a dollar.

Foreign investors also showed more interest in Japanese equities after the recent changes in corporate governance code.

The new code, introduced by Prime Minister Shinzo Abe’s government to improve economic growth, requires listed companies to have at least two independent directors.

The move is expected to nudge companies to become more shareholder friendly and improve returns.

Market indexes in Mumbai declined for the fifth day in a row and the two widely followed Sensex and Nifty closed at six-week low.

Rupee slid 1 paisa 62.26 against one dollar.

The Sensex Index slid 30.30 to close at 28,161.72. The CNX Nifty decreased 7.95 to 8,542.95.

Essar Power is scheduled to restart its power plant in Mahaan, Jharkhand after the company finalized its agreement for coal mining and production with the Central Government at Tokisud North coal block.

The Mahaan, Madhya Pradesh power plant has a capacity to generate 1,200 megawatts of electricity and the plant was set up with a total investment of ₹8,000 crore.

Monnet Ispat & Energy Limited advanced 2.2% to ₹53.65 after Times of India reported that Adani Group and JSW Group plans to buy a stake in Delhi-based Monnet Power, a subsidiary of Monnet Ispat and Energy Ltd.

Monnet Power assets are valued at more than ₹3,100 crore and its coal-based power plant with a capacity of 1,050 megawatts is located in Odisha.