Wall Street Turns Cautious, Asia and Europe Rally

Nichole Harper
09 Sep, 2015
New York City

Stocks on Wall Street opened higher after positive comments from Beijing and Tokyo. However, market sentiment turned negative in the afternoon trading ahead of Fed policy meeting next week. Apple released new phone versions and business user focused tablets.

[R]2:25 PM New York City, New York – Stocks on Wall Street opened higher after positive comments from Beijing and Tokyo. However, market sentiment turned negative in the afternoon trading ahead of Fed policy meeting next week. Apple released new phone versions and business user focused tablets.[/R]

U.S. stocks opened higher on the back of a strong rally in Asia and a surge in Europe but rate hike worries sapped market momentum and indexes turned negative in the last two hours of trading.

The Federal Open Market Committee is set to meet for two days starting on Sept. 16 and investors are speculating that rate may be increased for the first time nearly a decade.

On Wall Street, Tollbooth Strategy Index edged down 4.08 to 10,343.12.

S&P 500 index added 0.25 to 1,969.62 and the Nasdaq Composite Index rose 2.61to 4,815.19.

Crude oil in New York fell 95 cents to $44.99 a barrel and gold declined $11.90 to $1,109.10 an ounce.

Market also focused on the latest products announcement from Apple Inc. including iPad tablet designed for business users and a pair of new iPhones.

U.S. Movers

Barnes & Noble, Inc ((BKS)) tumbled 16.1% or $2.60 to $13.70 after the books and magazines retailer reported revenues in the first-quarter ending on August fell 1.5% from a year ago to $1.22 million.

Net loss in the quarter widened to $34.9 million or 68 cents per diluted share compared to $28.5 million or 56 cents from the same quarter last year.

HD Supply Holdings Inc ((HDS)) rose 6 cents to $33.31 after the industrial products distributor reported revenues in the second-quarter ending on August 2 soared 6.7% from a year ago to $2.01 billion.

Net income in the quarter jumped 127.1% to $109 million or 54 cents per diluted share compared to $48 million or 24 cents from the same quarter last year.

The retailer said preliminary net sales in August increased 5.9% to $646 million.

For the third-quarter, the company forecasted net sales in the range of $2 billion to $2.05 billion and diluted earnings per share between 63 cents and 68 cents.

European Markets

Total production output in July fell 0.4% from June but jumped 0.8% from a year ago month.

Output in mining and quarrying surged 6.7% and manufacturing output slid 0.5% and output in electricity declined 2.5% from a year ago month, Office of the National Statistics said.

Separately, the department said the seasonally adjusted UK trade deficit in goods and services in July widened to £3.4 billion from £2.6 billion in June.

Export prices in July fell 0.7% and import prices slid 0.1%.

In London trading, FTSE 100 index jumped 97.55 or 1.6% to 6,243.16 and in Frankfurt the DAX index gained 138.67 or 1.4% to 10,410.99.

In Paris, CAC 40 index soared 110.46 or 2.4% to 4,709.18.

Barratt Developments Plc rose 0.3% to 638 pence after the U.K.-based residential property developer reported revenues in the year ending in June jumped 10.8% from a year ago to £3.76 billion from £3.16 billion.

Net profit in the quarter surged 47.2% from a year ago to £449.4 million compared to £305.4 million and diluted earnings per share increased to 44.6 pence from 30.4 pence.

Ryanair Holdings Plc surged 5.9% to €13.70 after the Ireland-based low-cost airline company lifted net profit forecast for the year between €1.18 billion and €1.23 billion compared to previous guidance in the range of €940 million to €970 million.

The airline company said traffic in the first-half jumped 13% form previous estimate of 10% and fares were increased to 2% compared to expect to a flat.

For the year, the company now forecasted traffic to increase 104 million from previous guidance of 103 million.

Asian Markets

Nikkei average soared nearly 8% after dipping into negative territory following a broader rally in Asia. In the largest one-day gain since October 2008, Nikkei closed at a one-week high.

Stocks and market indexes in Tokyo soared and logged the largest one-day gain in seven years after investors stepped and increased stock exposure.

On the economic front, money supply continued to increase in Japan in August at a faster pace than in July.

The M2 money stock in August jumped 4.2% to 912.3 trillion yen followed by downwardly revised 4% increase in July, the Bank of Japan said today.

The Nikkei 225 Stock Average surged 1,343.43 or 7.7% to 18,770.51, the biggest single-day gain since October 2008 and the broader Topix index jumped 90.66 or 6.4% to 1,507.37.

The yen strengthened to 120.60 against a dollar.

Toshiba traded volatile and SoftBank and Fanuc led gainers in the index.

Stocks in Mumbai, India rebounded and market indexes traded firmly higher in active trading following the surge across Asia.

Rupee strengthened 14 paisa to 66.40 against one U.S. dollar.

The Sensex Index soared 401.71 or 1.6% to close at 25,719.58. The CNX Nifty increased 130.35 or 1.7% to 7,818.60.