U.S. Trade Deficit Widens, World Markets Focus on Domestic Earnings

Nichole Harper
05 Aug, 2015
New York City

S&P 500 and Tollbooth indexes extended gains in the session. Trade deficit widened in June and exports declined for the second month in a row. Private employers added fewer jobs in July. Media stocks declined after Disney lowered cable profit outlook.

[R]2:55 PM New York City, New York – S&P 500 and Tollbooth indexes extended gains in the session. Trade deficit widened in June and exports declined for the second month in a row. Private employers added fewer jobs in July. Media stocks declined after Disney lowered cable profit outlook.[/R]

Stocks on Wall Street traded higher after trade deficit widened and exports fell for the second month in a row.

U.S. trade deficit in June widened $2.9 billion to $43.8 billion from the revised $40.9 billion in May.

Exports in June slid $0.1 billion but imports jumped $2.8 billion compared to May, the Department of Commerce reported.

In addition, a private survey showed a decline in net new jobs added in July to 185,000 from the revised 229,000 in June, according to the data released by the ADP National Employment report.

On Wall Street, Tollbooth Strategy Index jumped 143.48 or 1.3% to 10,946.80.

S&P 500 index gained 11.23 or 0.5% to 2,104.56 and the Nasdaq Composite Index rose 54.16 or 1.1% to 5,159.81.

Crude oil in New York fell 22 cents to $45.52 a barrel and gold slid $7 to $1,083.70 an ounce.

U.S. Movers

Baxalta Inc, the biopharmaceutical company rejected an unsolicited takeover bid from Ireland-based pharmaceutical company Shire plc worth about $30 billion.

Baxalta noted that the same proposal was received privately from Shire on July 10.

Time Warner Inc ((TWX)) tumbled 7.7% or $6.65 to $81 after the media and entertainment company reported total revenues in the second-quarter ending in June climbed 8% to $6.79 billion form a year ago period.

Net income in the quarter surged 14.2% to $971 million or $1.16 per diluted share compared to $850 million or 95 cents from the same quarter last year.

Revenues in Turner segment jumped 3% to $2.83 billion and revenues in Home Box Office rose 1% to $1.44 billion while revenues in Warner Bros soared 15% to $3.30 billion.

The company confirmed adjusted earnings per share from continuing operations for the year between $4.60 and $4.70.

Walt Disney Co ((DIS)) declined 7.9% or $9.68 to $112.01 after the entertainment and media company reported total revenues in the third-quarter ending in June jumped 5% to $13.10 billion form a year ago period.

Net income in the quarter soared 10.2% to $2.48 billion or $1.45 per diluted share compared to $2.25 billion or $1.28 from the same quarter last year.

Disney said revenues in media networks segment in the quarter climbed 5% to $5.8 billion and revenues studio entertainment division surged 13% to $2. Revenues in parks and resorts jumped 4% to $4.1 billion while revenues in consumer products segment soared 6% to $954 million.

European Markets

Seasonally adjusted retail trade in June fell 0.6% compared to May in euro area and 0.5% in the wider region EU28.

May retail trade increased 0.1% in the euro area and 0.2% in the EU28, according to Eurostat, the statistics office of the euro zone.

In London trading, FTSE 100 index gained 47.57 or 0.7% to 6,734.48 and in Frankfurt the DAX index increased 160.76 or 1.4% to 11,616.31.

In Paris, CAC 40 index jumped 80.35 or 1.6% to 5,192.

Beiersdorf AG jumped 3.1% to €82.50 after the Germany-based personal and cosmetic products maker reported total revenues in the first-half ending in June climbed 7.3% to €3.40 billion or €3.17 billion in a year ago period.

Net profit in the period soared 13.6% from a year ago to €351 million compared to €309 billion.

The Nivea skin care products maker said sales in Eastern Europe region jumped 6.4% but sales in Western Europe dropped 1.4%.

Beiersdorf forecasted sales for the year in the consumer business segment to increase between 3% and 5%.

Societe Generale SA surged 8.9% to €48.63 after the France-based bank reported interest income in the first-half ending in June jumped 4.1% to €12.52 billion or €12.03 billion in a year ago period.

Net profit in the period surged 77.6% from a year ago to €2.22 billion compared to €1.25 billion and diluted earnings per share jumped to €2.54 from €1.37.

UniCredit SpA soared 6.4% to €24.29 after the Italy-based financial services provider reported total group revenues in the first-half ending in June gained 0.9% to €11.48 billion or €11.39 billion in a year ago period.

Net profit in the period declined 7.3% from a year ago to €1.03 billion compared to €1.12 billion.

The bank set aside €913 million to cover loans losses, less than from €1 billion in a year ago period and improved assets performance after creating a division to reduce the non-core assets.

Asian Markets

Investors shifted focus to domestic earnings. Toyota said quarterly net rose 10% and reaffirmed its annual global production outlook with a slight change in production mix. Marubeni said quarterly net rose 7% but sales declined 10%.

Investors shifted focus to domestic earnings after Toyota revised its annual production outlook and Marubeni said sales in the quarter declined on lower price of imported crude oil related products.

The Nikkei 225 Stock Average gained 93.70 or 0.5% to 20,614.06 and the broader Topix index edged up 6.02 to 1,665.85.

The yen eased to 124.41 against a dollar.

Toyota Motor Corp dropped 2.4% to 7,930 yen after the auto maker reported net sales in the first-quarter ending in June climbed 9.3% to 6.99 trillion yen from 6.39 trillion yen in a year ago period.

Net income in the quarter soared 10% to 646.39 billion yen compared to 587.77 billion yen and diluted earnings per share jumped to 205.30 yen from 185.34 yen in the same period a year ago.

For the year, Toyota forecasted net sales to increase 2.1% to 27.80 trillion yen and net income to jump 3.5% to 2.25 trillion yen.

Separately, the auto maker revised its production and sales plan for the year as domestic production at Toyota unit to increase 80,000 units to 3,210,000 units while reduce the production by the same number in outside of Japan to 5,800,000 units.

Thus the Toyota said total number of worldwide production will remain at 9,010,000 units as estimated in January 2015.

Toyota forecasted domestic sales in fiscal 2015 to jump 30,000 units to 1,480,000 units while sales in outside Japan to decline 60,000 units to 7,670,000 units.

The auto maker estimated overall sales for the year at Toyota to drop by 30,000 units to 9,150,000 units, excluding sales in Daihatsu and Hino.

Market indexes in Mumbai traded higher and rupee held firm a day after the Reserve Bank left rates unchanged and signalled improving economic conditions.

Rupee closed unchanged at to 63.75 against one U.S. dollar.

The Sensex Index jumped 151.15 or 0.5% to close at 28,223.08. The CNX Nifty increased 51.05 or 0.6% to 8,567.95.

Balaji Telefilms reacquires 26% stake from a unit of 21st Century Fox.