U.S. Indexes Rebound, VW Surpasses Toyota as Top Automaker

Nichole Harper
28 Jul, 2015
New York City

U.S. market indexes staged a slight rebound but commodities prices continue to test new lows and European markets lacked directions. Sell-off in China intensified in smaller exchanges. Volkswagen surpassed Toyota as the world

[R]2:05 PM New York City, New York – U.S. market indexes staged a slight rebound but commodities prices continue to test new lows and European markets lacked directions. Sell-off in China intensified in smaller exchanges. Volkswagen surpassed Toyota as the world’s largest automaker.[/R]

Stocks rebounded on Wall Street and commodities hovered near multi-year lows as sell-off intensifies in China and European markets lacked direction.

Currencies and stocks looked at moves in commodities markets as oil traded volatile with a downward bias and precious and base metals drifted lower on the renewed worries that China statistics may overstate economic growth in the second largest economy of the world.

On Wall Street, Tollbooth Strategy Index gained 69.21 or 0.7% to 10,733.14.

S&P 500 index increased 19.27 or 0.9% to 2,086.86 and the Nasdaq Composite Index rose 34.87 or 0.7% to 5,074.75.

Crude oil in New York jumped 74 cents to $48.13 a barrel and gold slid $1.70 to $1,095.20 an ounce.

Volkswagen surpassed Toyota as the world’s largest vehicle maker in the first half of 2015. Volkswagen sold 5.04 million vehicles and Toyota, edging ahead of Toyota’s 5.02 million unit sales.

Weak emerging market sales for Toyota affected total sales and rising tax on smaller car in Japan also contributed to the overall weakness.

In addition, Volkswagen may find it difficult to maintain its momentum with more than 120 production facilities and 310 models and nearly one third of sales in China where outlook for additional gains is limited in the near future.

Volkswagen is scheduled to release its earnings on Wednesday and Toyota is to release on next Tuesday.

Toyota also forecast flat sales in the fiscal year ending in Mach 2016.

U.S. Movers

Ford Motor Company ((F)) rose 12 cents to $14.70 after the auto maker reported revenues in the second-quarter ending in June slid 0.1% to $37.1 billion form a year ago period.

Net income in the quarter surged 44% to $1.9 billion or 47 per diluted share compared to $574 million or 15 cents from the same quarter last year.

Honeywell International Inc ((HON)) increased 1.9% or $1.97 to $103.61 after the aerospace products maker agreed to acquire the Elster unit of U.K.-based engineering company Melrose Industries plc for about $5.1 billion or £3.3 billion in cash.

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

Honeywell forecasted revenues for the year in the range of $39 billion to $39.6 billion and earnings per share between $6.05 and $6.15.

Pfizer Inc ((PFE)) gained 1.6% or 55 cents to $34.89 after the biopharmaceutical company revenues in the second-quarter ending in June dropped 7% to $11.85 billion from a year ago period.

Net income in the quarter plunged 10% to $2.63 billion or 42 cents per diluted share compared to $2.91 billion or 45 cents from the same quarter last year.

Pfizer forecasted revenues for the year between $45 billion and $46 billion and diluted earnings per share in the range of $1.38 to $1.47.

European Markets

The seasonally adjusted UK service sector index jumped 2.7% in May from a year ago month, the Office of the National Statistics reported today.

Separately, the statistics bureau said in a preliminary estimate, second-quarter U.K. GDP jumped 0.7% from 0.4% in first-quarter but declined from 2.6% in a year ago period.

In London trading, FTSE 100 index rose 21.91 or 0.4% to 6,527.04 and in Frankfurt the DAX index rose 34.88 or 0.2% to 11,475.47.

In Paris, CAC 40 index increased 27.40 or 0.6% to 4,955.18.

BP Plc increased 1.7% to 393.77 pence after the U.K.-based oil and gas explorer reported total revenues in the second-quarter ending in June declined 35.5% to $61.80 billion from $95.83 billion in a year ago period.

Net in the quarter swung to a loss from a year ago to $5.78 billion compared to profit of $3.43 billion and diluted loss per share to 31.83 cents from diluted earnings per share of 18.15 cents.

BP reported replacement cost loss in the quarter of $6.3 billion and Deepwater Horizon oil spill, an additional non-operating pre-tax charge of $9.8 billion was included in the result for the second-quarter.

Kering SA soared 6.2% to €173.60 after the France-based luxury goods retailer said revenues in the first-half ending in June surged 17% to €5.51 billion or $4.71 billion in a year ago period.

Net profit in the quarter soared 123.3% from a year ago to €423.1 million compared to €184.5 million and diluted earnings per share climbed to €3.36 from €1.46.

The group''s gross margin in the first-half jumped 13.2% to €3,399 million form a year ago period.

The retailer said revenues in Gucci segment climbed 11.8% and Bottega Veneta posted first-half revenue soared 19.7% while Yves Saint Laurent again posted strong first-half revenue growth of 38.2%.

Orange SA increased 0.8% to €15.07 after France-based telecom operator said revenues in first-half ending in June edged down 0.2% to €19.56 billion from €19.59 billion in a year ago period.

Net profit in the period surged 89.3% form a year ago to €1.10 billion compared to €581 million and diluted earnings per share jumped to €0.39 from €0.21.

Orange said the number of mobile services customers in the period climbed 6.9% to 189.8 million while customers in Africa and the Middle East climbed 12.4% to 102 million.

The mobile company forecasted operating profit for the year in the range of €11.9 billion from €12.1 billion excluding Jazztel and Méditel business.

Asian Markets

Nikkei average in Tokyo declined following another day of route in commodities complex and in China indexes.

Kao Corp and Tokyo Electron were in focus after quarterly results. Toyota Motor estimated flat annual global unit sales after first-half sales declined 1.5%.

In volatile trading in Tokyo, market indexes declined following more losses in commodities and energy complex.

Investors digested latest earnings releases and looked at auto sales from Toyota and electronic equipment sales from Tokyo Electron and consumer products sales at Kao Corp.

The Nikkei 225 Stock Average fell 21.21 to 20,328.89 and the broader Topix index slid 8.44 to 1,629.46.

The yen closed at 123.67 against a dollar.

Investors also worried that the latest extended plunge in China market may spill over in Asia-wide and depress market sentiment in the weeks ahead.

Market indexes in Shanghai declined 1.7% a day after 8.5% plunge on Monday and indexes in Shenzhen dropped 7% in today’s session.

Indexes have now dropped more than 30% in the last four weeks after a jump of more than 150% in the twelve months to June.

Hino Motors, Ltd jumped 2.7% to 1,471 yen after the Nikkei news said trucks maker’s sales for the first-quarter ending in June likely to edged up 1% to about 370 billion yen and operating profit to climb 8% to 25 billion yen.

Hino reaffirmed operating profit forecast for the year to jump 4% to 110 billion yen.

Toyota Motor Corp slipped 1.3% to 8,077 yen after the auto maker forecasted global car sales for the fiscal year ending March 2016 of about 8.9 million compared to reported sales of 8.97 million in a year ago period.

For the first-half car sales to drop 1.5% to 5.02 million units due to weak demand in emerging markets and higher taxes on small vehicles in Japan.

Market indexes in Mumbai declined for the fourth day in a row as international markets lost more than 3% in the last week.

The ongoing slide in crude oil price was overshadowed by the increased scrutiny of the so called P-notes used by foreign investors.

Participatory Notes, one of the popular stock market investment vehicles by foreign investors has also been used by local businesses to reroute black money.

Rupee strengthened 25 paisa to 63.91 against one U.S. dollar.

The Sensex Index slipped 102.15 or 0.4% to close at 27,459.23. The CNX Nifty fell 24 or 0.3% to 8,337.

Maruti Suzuki, the largest automaker in India said quarterly profit soared 57% on 17% increase in revenues.

One of the largest generic pharmaceuticals maker in India, Torrent, said net surged 75% on rising exports.

Punjab National Bank, the second tier bank controlled by government said bad loan ratio surges and another state controlled bank Union Bank said net declined.