S&P 500 Wipes Out Yearly Gain, Oil Prices at One-Year Low

Nichole Harper
27 Jul, 2015
New York City

Market indexes on Wall Street extended losses and major indexes are nearing to wipe out gains in the year. Crude oil extended five-week long losses and drops to one-year low but gold rebounded. Asian markets dropped after another sharp decline in Shanghai.

[R]2:20 PM New York City, New York – Market indexes on Wall Street extended losses and major indexes are nearing to wipe out gains in the year. Crude oil extended five-week long losses but gold rebounded. Asian markets dropped after another sharp decline in Shanghai.[/R]

Stocks on Wall Street headed lower on Merger Monday, weakening outlook for commodities prices and another sharp fall in Chinese stocks.

In addition, lacklustre economic data and earnings also contributed to the lack of enthusiasm on Wall Street.

U.S. durable goods orders in June jumped 3.4% to $235.3 billion after two months of decline and 2.1% decrease in May.

Orders excluding transportation increased 0.8% and defense climbed 3.8%, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index slipped 63.09 or 0.6% to 10,684.22.

S&P 500 index slid 8.43 or 0.4% to 2,070.31 and the Nasdaq Composite Index fell 40.61 or 0.8% to 5,048.28.

Crude oil in New York slipped 46 cents to $47.68 a barrel and gold jumped $11.70 to $1,097.20 an ounce.

U.S. Movers

McGraw Hill Financial Inc ((MHFI)) plunged 6.2% or $6.49 to $99.09 after the benchmarks and ratings agency agreed to acquire a financial data and information company SNL Financial owned by private equity firm New Mountain Capital LLC for about $2.23 billion.

McGraw said it may finance $525 million in cash and $1.7 billion in new debt.

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

Separately, the ratings and financial statistical data provider reported sales in the second-quarter ending in June increased 3% to $1.34 billion from a year ago period.

Net income in the quarter soared 21% to $353 million or $1.28 per diluted share compared to $292 million or $1.06 from the same quarter last year.

The company reaffirmed its full-year forecast for adjusted earnings per share between $4.35 and $4.45.

Teva Pharmaceutical Industries Ltd ((TEVA)) surged 12.7% or $7.84 to $69.68 after the pharmaceutical company agreed to acquire the generic drugs business of Ireland-based Allergan Plc for about $40.5 billion in a cash and stock.

The generic drugs maker received $33.75 billion in cash and shares valued at $6.75 billion of Teva.

The transaction is expected to close in the first quarter of 2016.

Separately, the company said it has withdrawn its proposal to acquire all of the outstanding ordinary shares of Mylan N.V.

Separately, Teva said revenues in the second-quarter ending in June slid 2% to $4.97 billion from a year ago period.

Teva added free cash flow as of June 30, of about $1.3 billion jump 51% from the second-quarter of 2014.

The company lifted earnings per share forecast for the year in the range of $5.15 to $5.40 compared to previous estimated range between $5.05 and $5.35.

European Markets

European markets traded lower and metals and crude prices dropped to a new low in the year as China slow down looms and the U.S. dollar continues its advance.

In London trading, FTSE 100 index fell 44.92 or 0.7% to 6,534.84 and in Frankfurt the DAX index slumped 229.35 or 2% to 11,119.26.

In Paris, CAC 40 index dropped 97.24 or 1.9% to 5,960.02.

Deutsche Boerse AG slipped 1% to €83.28 after the Germany-based stock exchange operator agreed to acquire domestic foreign exchange trading platform 360T Beteiligungs GmbH for €725 million or $796 million.

Pearson Plc declined 4% to 1,170.25 pence after the U.K.-based media company confirmed that the company is in talk with The Economist Group Board and trustees regarding the potential sale of 50% stake in the group.

UBS AG dropped 2.1% to 21.20 Swiss francs after the Switzerland-based financial services provider reported revenues in the first-half ending in June climbed 15.6% to 16.66 billion francs form 14.41 billion francs in a year ago period.

Net profit in the quarter soared 72.4% from a year ago to 3.19 billion francs compared to 1.85 billion francs and diluted earnings per share jumped to 0.85 francs from 0.48 francs.

Asian Markets

Stocks in Tokyo and Asia were under pressure after volatility perked up in Shanghai market and the reference index plunged 8%, the largest one-day decline in eight years.

Moreover, commodities also declined to a new multi-year low after the latest market plunge in China and crude oil extended six-week decline to 25% and copper and iron ore dropped to a new yearly low.

The Nikkei 225 Stock Average slumped 194.43 or 0.9% to 20,350.10 and the broader Topix index slipped 17.96 to 1,637.90.

The yen closed at 123.40 against a dollar.

Canon Inc decreased 0.7% to 3,909.50 yen after the diversified company reported net sales in the first-half ending in June rose 2% to 1.83 trillion yen from 1.80 trillion yen in a year ago period.

Net income in the period plunged 20.5% to 102.13 billion yen compared to 128.46 billion yen and diluted earnings per share dropped to 93.52 yen from 114.47 yen the same period a year ago.

Canon said sales in imaging system and digital camera business declined 5% to 595.2 billion yen but sales in semiconductor lithography and other segments soared 18.7% to 219.7 billion yen.

For the year, Canon forecasted net sales to jump 5.4% to 3.93 trillion yen and net income drop 3.8% to 254.80 billion yen.

Market indexes in Mumbai, India plunged following a sharp decline in Shanghai and central government in India renews its focus on abuse of participatory notes to reroute black money.

The benchmark index in China plunged 8%, the largest one-day decline in eight years, on the worries that the recent market surge in the last one year may have entered into a bubble.

Before the latest plunge, the market index had surged more than 60% in the last twelve months of trading.

Rupee weakened 14 paisa to 64.18 against one U.S. dollar.

The Sensex Index declined 550.93 or 1.9% to close at 27,561.38. The CNX Nifty dropped 160.55 or 1.9% to 8,361.