S&P 500, Dow, Nasdaq Hit Valuation Barriers; China Cuts Rate Again

Nichole Harper
11 May, 2015
New York City

On Merger Monday market indexes trended lower and European markets closed down. Crude oil and gold turned lower. Greece said it is set to release payment due to the IMF tomorrow. Shanghai index surged 3% after China lowered rate for the third time in six months.

[R]2:30 PM – On Merger Monday market indexes trended lower and European markets closed down. Crude oil and gold turned lower. Greece said it is set to release payment due to the IMF tomorrow. Shanghai index surged 3% after China lowered rate for the third time in six months.[/R]

Stocks struggled to open higher and quickly descended on Merger Monday and investors reacted to corporate news and latest earnings results.

On Wall Street, Tollbooth Strategy Index fell 0.2% or 16.80 to 10,746.95.

Popular market indexes are hovering near record highs and S&P 500 index nearing the record of 2,117.69 set on April 24 and Dow Jones Industrial Average is 0.8% away from its record of 18,288.63 on March 2.

S&P 500 index fell 1.98 to 2,114.12 and the Nasdaq Composite Index rose 6.36 to 5,009.91.

For the year, S&P 500 index has advanced 2.5%, Dow Jones has added 1.7% and Tollbooth has jumped 7%.

Nasdaq index has jumped 5.7% in the year so far.

Crude oil in New York slipped 47 cents to $58.92 a barrel and gold dropped $9.80 to $1,179.10 an ounce.

European markets opened lower and edged lower following a weakness in New York trading and Greece said it is ready to release 750 million euros to international lenders squelching rumors of imminent default.

U.S. Movers

DISH Network Corp ((DISH)) slipped 1% or 70 cents to $66.16 after the pay-television services provider reported revenues in the first-quarter ending in March jumped 3.6% to $3.72 billion form a year ago period.

Net income in the quarter surged 99.4% to $351 million or 76 cents per diluted share compared to $176 million or 38 cents from the same quarter last year.

The company said Pay-TV subscribers in the quarter dropped 1.8% to 13.844 million from 14.097 million in the same period a year ago.

Noble Energy, Inc ((NBL)) plunged 7.1% or $3.48 to $45.72 after the oil and gas producer agreed to acquire Rosetta Resources Inc in transaction valued at $2.1 billion, plus net debt as of March 31 of about $1.8 billion.

The transaction is expected to close in the third-quarter of this year.

Shares of Rosetta Resources Inc surged 25.9% to $24.32.

European Markets

In London trading, FTSE 100 index edged up 0.04% or 3.13 to 7,049.95 and in Frankfurt the DAX index slipped 0.4% or 43.88 to 11,665.85.

In Paris, CAC 40 index declined 1.1% or 57.27 to 5,033.12.

EXOR SpA gained 0.4% to €42.53 after the Italy-based diversified investment company owned by Agnelli family agreed to divest 75% stake in its New York-based real estate unit Cushman & Wakefield to the U.S.-based real estate developer DTZ for about $2 billion.

The transaction is expected to close in the fourth-quarter.

Talanx AG fell 0.06% to €26.75 after the Germany-based insurance company stated gross written premiums in the first-quarter ending in March soared 12.2% to €9.44 billion from €8.41 billion in a year ago period.

Net profit in the quarter jumped 16.2% from a year ago to €251 million compared to €216 million and diluted earnings per share climbed to €0.99 from €0.86.

""We are confirming our target of generating Group net profit of at least €700 million in fiscal 2015,"" chief executive officer Herbert K. Haas said.

Asian Markets

Nikkei average in Tokyo rebounded after China lowered its one-year lending and deposit rate by 25 basis points over the weekend.

Toshiba plunged 17% after the conglomerate expanded its accounting investigation. Suzuki Motor estimate fiscal year net to rise 14%. Sega Sammy swung to annual loss.

Stocks in Tokyo advanced after China lowered its reference rate over the weekend and on strong U.S. jobs data. However, Sharp and Toshiba plunged.

Market sentiment at the opening was strong and stocks advanced after China lowered its lending and deposit one-year rate by 25 basis point, third rate cut in six months by the People’s Bank of China.

On Friday, U.S. said jobless rate eased to 5.4% in April from 5.5% in March and net jobs additions picked up.

The Nikkei 225 Stock Average climbed 241.72 or 1.3% to 19,620.91 and the broader Topix index gained 10.57 to 1,598.33.

The yen closed at 119.97 against a dollar.

Toshiba plunged more than 15% to a one-year low after the conglomerate withdrew its earnings estimate and canceled a dividend payment and said it has increased the scope of its accounting procedures investigation.

Sharp collapsed 31% to a 3-year low after the company said it is looking to raise capital including a preferred stock offering after a Nikkei report said that the electronics maker is looking to wipe out its capital by 99% to 100 million yen.

Market indexes on Dalal Street in Mumbai, India soared ahead of the release of industrial production and consumer price inflation data tomorrow.

Stocks opened higher after China eased its monetary policy and speculators bid up prices in anticipation of two economic data tomorrow and foreign investors stepped up and increase exposures.

Rupee strengthened 6 paisa 63.87.

The Sensex Index jumped 401.91 or 1.5% to close at 27,507.30. The CNX Nifty rose 133.75 or 1.6% to 8,325.25.

Adani Power Limited climbed 4.1% to ₹43.40 after the thermal power plant operator said net in the fourth-quarter soared 71.7% to ₹715.05 crore.

Total revenues in the quarter declined 22.2% to ₹4,661.34 crore.

Separately the Adani group of companies in a filing with the Bombay Stock Exchange confirmed restructuring plan approval from the Gujarat High Court.

Five group companies – Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power, Adani Transmission and Adani Mining Private – will consolidate in three companies as proposed in January.

Adani Enterprises increased 2.8% and Adani Ports and Adani Power gained 1.4%.

Bank of Baroda surged 16.9% to ₹169.65 after the financial services provider said net in the fourth-quarter plunged 48.3% to ₹598.35 crore. Total revenues in the quarter increased 3.8% to ₹12,057.39 crore.

The ratio of net non-performing assets in the quarter declined to 1.89% compared to 2.11% in the same period last year.