Indexes Struggle on Wall Street and Europe, Robust U.S. Consumer Spending

Nichole Harper
25 Jun, 2015
New York City

Stocks on Wall Street turned lower on stretched valuations and investors digested jobless claims and consumer spending reports. Consumer spending increased at the fastest pace in six years in May on rising demand for automobiles and other durable goods.

[R]3:55 PM – Stocks on Wall Street turned lower on stretched valuations and investors digested jobless claims and consumer spending reports. Consumer spending increased at the fastest pace in six years in May on rising demand for automobiles and other durable goods.[/R]

Stocks on Wall Street turned lower and weekly jobless claims hovered near multi-year low and consumer spending increased at the fastest pace in six years in May.

Seasonally adjusted weekly jobless claims rose 3,000 to 271,000 from the previous week''s revised claims of 268,000, the Department of Labor said.

Personal income in May increased and matched the revised rate of 0.5% in April, the Department of Commerce reported today.

On Wall Street, Tollbooth Strategy Index gained 0.4% or 40.82 to 10,857.11.

S&P 500 index edged up 1.49 to 2,110.12 and the Nasdaq Composite Index added 4.21 to 5,126.25.

Crude oil in New York fell 46 cents to $59.81 a barrel and gold slid 0.30 cents to $1,172.60 an ounce.

U.S. Movers

Accenture Plc increased 2.2% or $2.18 to $99.95 after the Ireland-based outsourcing services provider reported revenues in the third-quarter ending in May rose 0.3% to $8.27 billion from a year ago period.

Net income in the quarter slipped 3.3% to $840 million or $1.24 per diluted share compared to $868.9 million or $1.26 from the same quarter last year.

For the year, Accenture lifted adjusted earnings per share forecast between $4.73 to $4.78 on revenue growth between 9% and 10%.

Earlier the company estimated earnings per share of $4.66 to $4.76 on revenue growth of 8% to 10%.

The company forecasted sales for the fourth-quarter in the range of $7.45 billion to $7.7 billion.

Barnes & Noble, Inc ((BKE)) decreased 3% or 80 cents to $25.53 after the bookseller said net sales in the fourth-quarter ending on May 2 plunged 10.4% to $1.18 billion from a year ago period.

Retail comparable store sales in the quarter decreased 1.3%.

Net loss in the quarter narrowed to $19.4 million or 37 cents per diluted share compared to $36.7 million or 72 cents from the same quarter last year.

The bookseller added revenues in the retail segment plunged 9% to $869 million and revenue for the college business dropped 8.1% to $274 million.

The company said revenue for the NOOK segment in the quarter tumbled 39.8% to $52 million.

Bed Bath & Beyond Inc ((BBBY)) slumped 2.7% or $1.89 to $68.45 after the home furnishings retailer reported net sales in the first-quarter ending in May increased 3.1% to $2.74 billion from a year ago period.

Same-store sales for the first quarter rose 2.2%.

Net income in the quarter declined 15.3% to $158.5 million compared to $187.1 million and diluted earnings per share were flat at 93 cents from the same quarter last year.

The retailer forecasted same-store sales for the second-quarter to increase between 2% and 3% and earnings per share in the range of $1.18 to $1.23.

European Markets

In London trading, FTSE 100 index fell 0.5% or 22.06 to 6,816.62 and in Frankfurt the DAX index slid 0.6% or 70.50 to 11,401.74.

In Paris, CAC 40 index decreased 0.6% or 31.76 to 5,011.78.

Green Investment Bank Plc, the UK Government plans to divest part of the stake for as much as £3 billion.

The bank was launched three years ago with the help of public funds.

The bank invested £2 billion in 50 projects worth over £8 billion in waste management plants and offshore wind farms.

The bank launched 22 new green energy projects in fiscal 2014-2015 and committed £723 million of its own capital to projects with a total value of £2.5 billion.

H & M Hennes & Mauritz AB slumped 3.8% to 327.10 Kronor after the Sweden-based fashion retailer reported net sales in the first-half ending in May climbed 70% to 86.1 billion kronor from 70 billion kronor in a year ago period.

Net profit in the period soared 18.8% from a year ago to 10.1 billion kronor compared to 8.5 billion kronor and earnings per share jumped to 6.08 kronor from 5.11 kronor.

Asian Markets

Market indexes in Tokyo and in Asia declined after Greek debt talks collapsed and investors also digested economic growth data in the U.S.

After the first revision, the U.S. economy shrank at a smaller rate than previously estimated a month ago in May as the largest economy struggled with the rising dollar and growing trade deficit and strike at West Coast ports.

The Nikkei 225 Stock Average slipped 96.63 or 0.5% to 20,771.40 and the broader Topix index slid 8.98 to 1,670.91.

The yen closed at 123.75 against a dollar.

Stocks traded higher on Dalal Street and market indexes advanced for the ninth time in last ten trading sessions after Prime Minister Narendra Modi sought more homes built for poor.

Prime Minister unveiled three schemes that will accelerate home buildings across the nation, build 100 “smart cities” and rejuvenate 500 cities that lack infrastructure.

The government plans to build 20 million or 2 crore homes at the expense of ₹300,000 crore. The government plans to spend additional ₹48,000 crore in building smart cities and ₹50,000 crore in urban renewal projects.

Rupee strengthened 2 paisa to 63.58 against one U.S. dollar.

The Sensex Index advanced 166.30 or 0.6% to close at 27,895.97. The CNX Nifty increased 37.15 or 0.4% to 8,398.

Prime Minister Modi unveiled three pronged plan to kick off housing projects, build smart cities and provide infrastructure to smaller cities.

The ambitious plan calls for government spending of $70 billion over the next seven years. Investors took positive view of the plan and bid up stocks.

Adani Enterprises Limited dropped 2.6% to ₹94.50 after the oil and gas explorer’s subsidiary plans to rearrange budget for its $7.72 billion Carmichael coal mine project in Australia.