Wall Street in Holding Pattern Ahead of Fed Statement

Nichole Harper
17 Jun, 2015
New York City

U.S. stocks were in holding pattern ahead of rate decision this afternoon from the Fed. Fed fund rates, bank rates for other banks, reached a two-year high of 0.14% average. California State

[R]12:30 PM – U.S. stocks were in holding pattern ahead of rate decision this afternoon from the Fed. Fed fund rates, bank rates for other banks, reached a two-year high of 0.14% average. California State’s Labor Commission ruled Uber driver should be classified as an employee.[/R]

U.S. stocks were in a holding pattern ahead of Fed statement in the afternoon and Greek crisis dampened sentiment in the euro zone.

Federal Reserve is set to release its rate and policy decision at the end of 2-day meeting after 2 p.m. ET.

Economists expects the policy makers to stay the course and not lift rates today but investors will be looking for clues for the future rate hikes later in the year.

On Wall Street, Tollbooth Strategy Index gained 0.3% or 34.18 to 10,750.44.

S&P 500 index edged up 0.56 to 2,096.85 and the Nasdaq Composite Index rose 4.38 to 5,060.06.

Crude oil in New York added 0.08 cents to $60.05 a barrel and gold dropped $6.80 to $1,174.10 an ounce.

U.S. Movers

Allergan Plc increased $1.39 to $299.41 after the Ireland-based botox maker agreed to acquire Kythera Biopharmaceuticals Inc for about $2.1 billion in cash and stock.

Under the terms, Allergan will pay $75 per share, representing a 23.5% premium to closing price of $60.72 per share of June 16.

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

Shares of Kythera Biopharmaceuticals Inc surged 22.3% to $74.29.

Adobe Systems Inc ((ADBE)) slipped 1.5% or $1.19 to $78.75 after the software company reported total revenues in the second-quarter ending on May 29 climbed 8.4% to $1.17 billion from a year ago period.

Net income in the quarter soared 66.7% to $147.5 million or 29 cents per diluted share compared to $88.5 million or 17 cents from the same quarter last year.

Bob Evans Farms Inc ((BOBE)) jumped 2.9% or $1.41 to $48.92 after the full-service restaurant operator said net sales in the fourth-quarter ending on April 24 increased 1.8% to $332.4 million from a year ago period.

Same store sales in the quarter jumped 2.1%.

Net income in the quarter plunged 56.9% to $5.6 million or 24 cents per diluted share compared to $13 million or 40 cents from the same quarter last year.

FedEx Corporation ((FDX)) dropped 2.8% or $5.14 to $176.99 after the air freight and logistics company reported revenues in the fourth-quarter ending in May jumped 2.5% to $12.1 billion from a year ago period.

Net in the quarter swung to a loss of $895 million or $3.16 per diluted share compared to profit of $780 million or $2.62 from the same quarter last year.

The company said revenues in FedEx express segment dropped 4% to $6.70 billion while revenues in FedEx ground business climbed 19% to $3.57 billion from a year ago period.

Revenues for FedEx freight segment rose 1% to $1.6 billion and services revenues increased 1% to $407 million compared to same period a year ago.

European Markets

UK unemployment rate for the three months to April dropped to 5.5% from 5.7% in November to January and slid from 6.6% from a year ago period, the Office for National Statistics said today.

Seasonally adjusted construction activities in April rose 0.3% in euro area but fell 0.3% in the EU28 compared to a month ago, the Statistical Office of the European Communities reported.

In a separate report the department said in a preliminary estimate the annual inflation rate in the euro area rose 0.3% in May compared to break even in April.

In London trading, FTSE 100 index slipped 0.6% or 39.24 to 6,683.58 and in Frankfurt the DAX index fell 0.5% or 49.57 to 10,996.78.

In Paris, CAC 40 index declined 0.8% or 39.82 to 4,800.47.

Anite Plc surged 23.6% to 127.30 pence after the U.K.-based handset testing device provider agreed to be acquired by the U.S.-based electronic measurement instruments maker Keysight Technologies Inc for about £388 million or $607 million, 22.3% premium to closing price of 103 pence on June 16.

Under the terms, Anite shareholders will receive 126 pence in cash a share.

Berkeley Group Holdings Plc soared 8.6% to 3,430 pence after the U.K.-based property developer reported revenues in the year ending in April soared 30.8% to £2.12 billion from £1.62 billion in a year ago period.

Net profit in the quarter surged 44.6% from a year ago to £423.5 million compared to £292.9 million and diluted earnings per share jumped to 276.9 pence form 188.5 pence.

Remy Cointreau gained 1.1% to €64.79 after the France-based wines and spirits distributor stated sales in the year ending in March declined 6.4% to €965.1 million from €1.03 billion in a year ago period.

Net profit in the year climbed 18% from a year ago to €94.6 million compared to €80.2 million and earnings per share jumped to €1.91 from €1.27.

Asian Markets

Nikkei average in Tokyo increased and the yen held firm in active trading ahead of the U.S. Fed’ rate decision later in the day.

The trade deficit in May declined 76.5% to 215.97 billion yen from 917.22 billion yen in a year ago month, the Ministry of Finance said today.

Exports in the month jumped 2.4% to 5.74 trillion yen compared to 5.61 trillion yen a year ago month.

Import in May plunged 8.7% to 5.96 trillion yen from 6.52 trillion yen in May 2014.

The Nikkei 225 Stock Average slipped 38.67 or 0.2% to 20,219.27 and the broader Topix index fell 6.16 to 1,633.70.

The yen closed at 123.59 against a dollar.

Stocks on Dalal Street traded higher and the 10-year government bond yield increased to 7.92% from 7.88%.

The government has decided to increase import duty on long steel products to 7.5% from 5.5%, while on flat steel products to 10% from 7.5%, the CNBC TV 18 reported.

The steel stocks jumped after the announcement.

Steel Authority of India Ltd rose 1.83% to ₹61.15, JSW Steel Ltd jumped 3.30% to ₹867.05 and Jindal Steel and Power Ltd added 0.89% to ₹96.05.

Rupee strengthens 12 paisa to 64.12 against one U.S. dollar.

The Sensex Index advanced 146.15 or 0.6% to close at 26,686.51. The CNX Nifty rose 44.25 or 0.6% to 8,091.55.

Essar Power Transmission is in merger talks with Adani.

TCS and IBM are in a race to win Sweden-based AB Volvo''''s IT outsourcing contract worth about $500 million.