U.S. Stocks Struggle to Advance, Banks Report Rising Profits

Nichole Harper
16 Apr, 2015
New York City

Stocks struggled on Wall Street and banks reported higher than expected earnings. Goldman Sachs earnings soared offering another sign of the rebounding profits on Wall Street. German bond yields dropped closer to zero.

[R]2:30 PM New York – Stocks struggled on Wall Street and banks reported higher than expected earnings. Goldman Sachs earnings soared offering another sign of the rebounding profits on Wall Street. German bond yields dropped closer to zero.[/R]

Stocks struggled in New York after weekly jobless claims were below 300,000 and housing starts increased 2% in March.

Goldman Sachs reported higher than expected quarterly earnings and Citigroup was another large bank announced increase in earnings as the banking sector move forward and put the financial crisis in the rear view.

Seasonally adjusted weekly jobless claims climbed 12,000 to 294,000 from the previous week’s unrevised claims of 282,000, the Department of Labor said today.

Housing starts in March climbed 2% from the revised February data to 926,000 and housing permits declined 5.7% from the revised February rate but jumped 2.9% from a year ago month to 1,039,000, the Department of Commerce reported.

On Wall Street, Tollbooth Strategy Index slid 0.2% or 19.10 to 10,671.12.

S&P 500 index edged up 0.40 to 2,107.08 and the Nasdaq Composite Index fell 2.52 to 5,008.58.

Crude oil in New York rose 10 cents to $56.49 a barrel and gold fell $3.50 to $1,197.80 an ounce.

U.S. Movers

Citigroup Inc ((C)) gained 1.7% or 91 cents to $54.12 after the bank and financial services provider reported revenues in the first-quarter ending in March dropped 2.5% to $19.7 billion from a year ago period.

Net income in the quarter climbed 23.1% to $4.8 billion or $1.51 per diluted share compared to $3.9 billion or $1.23 from the same quarter last year.

The bank said group deposits in the quarter declined 7% to $900 billion and loans plunged 7% to $621 billion.

Goldman Sachs Group Inc ((GS)) fell 58 cents to $200.52 after the bank and brokerage group said net revenues in the first-quarter ending in March climbed 14% to $10.62 billion from a year ago period.

Net income in the quarter soared 41% to $2.75 billion or $5.94 per diluted share compared to $1.95 billion or $4.02 from the same quarter last year.

Netflix, Inc ((NFLX)) surged 16.3% or $77.14 to $551.02 after the video-streaming service provider said revenues in the first-quarter ending in March jumped 23.6% to $1.57 billion from a year ago period.

Net income in the quarter tumbled 55.4% to $23.7 million or 38 cents per diluted share compared to $53.1 million or 86 cents from the same quarter last year.

During the quarter, Netflix added about 2.3 million customers in the U.S. and 2.6 million internationally, by the end of the quarter total subscribers reached to 62.3 million.

The company said it added a record 4.9 million new members globally in the first quarter, against its forecast of 4.1 million.

For the second-quarter, the company forecasted earnings per share of about 26 cents.

European Markets

Market indexes in Europe traded lower a day after the European Central Bank chief highlighted the benefits of bond-buying program.

German government bond yield jumped to a new record high a day after the European Central Bank reaffirmed its commitment to continue to flood financial system with the newly printed money.

The yield on country’s 30-year bond dipped below 0.47% and on 10-year bond dropped to a new low of 0.073%.

In London trading, FTSE 100 index slipped 0.4% or 26.88 to 7,069.90 and in Frankfurt the DAX index declined 1.7% or 206.50 to 12,024.84.

In Paris, CAC 40 index dropped 0.5% or 24.75 to 5,229.60.

Debenhams Plc soared 6.8% to 85 pence after the online retailer said revenue in the first-half ending in February rose 1.6% to £1.3 billion from a year ago period.

Online sales surged 12.7% and comparable sales in the period increased 1.3%.

Pre-tax profit in the period jumped 4.3% from a year ago to £88.9 million compared to £85.2 million.

Unilever Plc climbed 3.5% to 3,036 pence after the U.K.-based consumer goods maker reported sales in the first-quarter soared 12.3% to €12.80 billion from €11.40 billion from a year ago period.

The company said sales in personal care division climbed 15.3% to €4.79 billion and sales in food division jumped 6.3% to €3.21 billion.

Revenues in homecare products surged 16.8% to €2.53 billion and revenues in refreshment segment soared 10.3% from a year ago to €2.28 billion.

Asian Markets

Japanese stocks traded lower and the food industry index fell after leading all other industries in the year with a surge of 18%.

Energy stocks led the gainers in the session after crude oil price jumped to a new 2015-high. Sharp Corp soared on the hopes of restructuring.

Stocks in Japan traded lower and market indexes declined to one-week low after the recent market leaders took a breather.

Food industry stocks, favored by pension funds and foreign investors, edged down after leading all other sectors with a surge of 18% in the year so far.

In addition, energy stocks led the gainers in Tokyo after crude oil price jumped to a new high in 2015 after the U.S. government report showed a smaller than expected increase in inventories.

Airlines, reliant of cheaper fuel, declined after the recent surge in oil prices.

The Nikkei 225 Stock Average rose 16.01 to 19,885.77 and the broader Topix index gained 10.61 to 1,599.42.

The yen closed at 119.36 against a dollar.

Market indexes in Mumbai edged lower in the absence of new catalyst and investors reacted to individual company news.

Tata Consultancy, the leading profit maker in the Tata Group, reported flat sales in the latest March quarter and net income declined 1.6%.

Investors look ahead to earnings from Infosys and Wipro, two other leading IT services companies, as a leading indicator of industry profit direction.

Rupee decreased 7 paisa to 62.30 against one dollar.

The Sensex Index dropped 133.65 or 0.5% to close at 28,666.04. The CNX Nifty decreased 43.50 or 0.5% to 8,706.70.

Stocks in Mumbai traded lower ahead of earnings announcements. Gammon secured two new projects.

Tata Steel production fell 1%. TCS, the flagship company of Tata Group reported flat quarterly sales. Tata Motors March global sales rise 9%.

Tata Consultancy Services Limited slipped 2.1% to ₹2,574 after the information technology services provider said quarterly net sales rose 0.1% to ₹24,539.9 crore, while net profit decreased 1.6% to ₹5,392.10 crore.

Separately, Tata Motors rose 2% after the vehicles marker reported 9% increase in global sales in March. Sales included Jaguar Land Rover unit sales.