Sharp Jump in European Markets Lift Indexes in U.S.

Nichole Harper
09 Apr, 2015
New York City

Market indexes on Wall Street struggled to advance and crude oil gained and weekly jobless claims rose less than expected. European markets advanced after German industrial production rose. Bank of England left its key lending rate on hold.

[R]1:35 PM New York – Market indexes on Wall Street struggled to advance and crude oil gained and weekly jobless claims rose less than expected. European markets advanced after German industrial production rose. Bank of England left its key lending rate on hold.[/R]

Stocks in New York opened higher but steadily lost ground and dipped in the negative territory. In the early afternoon, stocks managed to recover and market indexes traded in the positive zone.

Alcoa, kicked off unofficial earnings season, reported weaker than expected results and also guided softer market conditions in the current year.

Seasonally adjusted weekly jobless claims climbed 14,000 to 281,000 from the previous week’s unrevised claims of 267,000, the Department of Labor announced.

February wholesale sales fell 0.2% to $444.2 billion from the revised January sales and dropped 1.5% from a year ago month.

February inventories rose 0.3% to $574 billion from the revised January data and soared 6.1% from a year ago, the Department of Commerce reported today.

S&P 500 index edged up 2.02 or 0.1% to 2,083.80 and the Nasdaq Composite Index rose 5.25 or 0.1% to 4,955.84.

Crude oil in New York gained 86 cents to $51.28 a barrel and gold declined $7.80 to $1,195.30 an ounce.

U.S. Movers

Alcoa Inc ((AA)) declined 5.1% or 70 cents to $12.98 after the aluminum producer reported revenues in the first-quarter ending in March climbed 7% to $5.82 billion from a year ago period.

Net in the quarter swung to profit $195 million or 14 cents per diluted share compared to a loss of $178 million or 16 cents from the same quarter last year.

Apache Corporation ((APA)) gained 1.4% or 94 cents to $66.19 after the energy company agreed to divest its Australia-based exploration company to a consortium of private equity funds managed by Macquarie Capital Group Ltd and Brookfield Asset Management Inc for about $2.1 billion in cash.

The deal is expected to close in second-quarter of this year.

Costco Wholesale Corporation ((COST)) dropped 2% or $3.05 to $148.95 after the discount stores operator reported net sales in March that five-week period ending on April 4 were flat at $10.4 billion and total company comparable store sales slipped 2%.

Mylan N.V ((MYL)) climbed 3.6% or $2.56 to $70.86 after the U.K.-based pharmaceutical company offered to acquire Netherland-based generic drug maker Perrigo Co. Plc for $205 per share in cash and stock or $28.9 billion, a 25% premium to closing price on April 3.

European Markets

Stocks across the euro zone and in London gained for the second day and Bank of England left its rate on hold and German industrial production in February rose.

Industrial production in the largest economy in the euro zone rose 0.2% in February after a revised decline of 0.4% in January, according to the data released by the Economy Ministry in Berlin.

Exports increased 1.5% and imports gained 1.8% from January, according to a separate report released by the Federal Statistics Office.

The rising industrial activities offered yet another evidence of the gathering momentum in the German economy. The unemployment rate is at record low and business confidence increased for the fifth month in a row.

The central bank in the U.K. left rate unchanged for the 73rd month in a row and attention shifted to the next meeting after general election in May.

In London trading, FTSE 100 index jumped 1.1% or 76.12 to 7,013.53 and in Frankfurt the DAX index increased 0.9% or 104.72 to 12,140.58.

In Paris, CAC 40 index climbed 1.2% or 59.67 to 5,196.53.

Victrex Plc fell 0.4% to 2,032 pence after the U.K.-based polymer solutions provider said group revenues in the first-half ending in March climbed 8.7% to £130.3 million from £119.9 million in a year ago period.

The company added group sales in the period soared 28% to 2,028 tons compared to 1,584 tons in the same period a year ago.

Asian Markets

Nikkei 225 index in Japan extended the latest advance and closed at a new 15-year high. Weak commodities and yen, supported the gain in indexes. Aeon Mall said revenue in the fiscal year increased 15%. J. Front reported flat sales but earnings tumbled 37%.

Stocks in Tokyo opened higher and extended Nikkei index advance to another 15-year high on the hopes that foreign investors will continue to favor Japanese stocks over the U.S. and European markets.

U.S. Fed released minutes of its meeting in March and rate setting committee members appear to be divided on the timetable for the interest rate increase.

Traders were looking for U.S. rates to begin increasing as early as June but the latest minutes suggest that the rates may not increase till the September meeting.

Fed Chair Janet Yellen stressed in the statement that the committee does not have to see the evidence of inflation in prices and wages but enough confidence that inflation forces are gathering momentum.

In addition, after the market close, U.K. left its rate on hold for the 73rd month in a row, as expected by most economists.

The Nikkei 225 Stock Average jumped 147.91 or 0.8% to 19,937.72 and the broader Topix index gained 5.72 to 1,594.19.

The yen eased to close at 120.27 against a dollar.

Market indexes in Mumbai opened higher and rupee firmed and investors reviewed the latest outlook for debt rating from Moody’s.

The U.S. based credit rating services provider, Moody’s reaffirmed India’s sovereign debt rating at Baa3, the lowest investment grade debt rating and revised the outlook to “positive” from “stable” and noted improving economic prospects.

The U.S. debt rating company, Moody’s rating views are a suspect when it comes to emerging markets. The rating agency is widely perceived to apply different standards when it comes to U.S. government debt and debts issued by the governments of developing nations.

The inflated and misleading U.S. mortgage securities rating issued by Moody’s played a key role in the U.S. financial market crisis last decade that led to a worldwide recession and forced 10 million out of work.

Rupee closed unchanged at 62.24 against one dollar.

The Sensex Index climbed 177.46 or 0.6% to close at 28,885.21. The CNX Nifty gained 63.90 or 0.7% to 8,778.30.

Wireless telecom stocks declined after the regulatory agency lowered the upper limit on the roaming charges. Reliance Industries extended 2-day rally to 7% after the company is said to have discovered new natural gas field at its KG D6 basin. Vertex plans to increase its stake in GVK Power to 15.24%.

Adani Power Ltd increased 2.5% to ₹49.85 after a news report suggested that State Bank of India is nearing an agreement with the company to finalize the ₹15,000 crore term loan refinancing proposal for two subsidiaries in Maharashtra and Rajasthan.

Reliance Industries Ltd increased 3% to ₹894.56 and extended 2-day rally to 7% on an unconfirmed news report that the company has discovered a large gas field at MJ1 block in the KG-D6 basin.