Rate Jitters Drive Sentiment on Wall Street and Global Markets

Nichole Harper
14 Sep, 2015
New York City

Stocks on Wall Street eased and crude oil and copper declined as investors awaited the outcome of Fed policy meeting on Thursday. Market sentiment was tentative after China reported slowing growths in investments and factory output.

[R]1:05 PM New York City, New York – Stocks on Wall Street eased and crude oil and copper declined as investors awaited the outcome of Fed policy meeting on Thursday. Market sentiment was tentative after China reported slowing growths in investments and factory output.[/R]

Stocks on Wall Street eased as rate jitters drove market sentiment and the latest economic data from China offered more signs of slowing economic growth.

Fed policy makers are scheduled to conclude 2-day meeting on Thursday and economists are split on the next move from the central bank. U.S. rates have been near zero percent for more than six years and rates have not been increased longer than ten years.

Fed may wait till the next meeting with the rising volatility in world markets and slowing economy in China.

On Wall Street, Tollbooth Strategy Index slipped 67.26 or 0.7% to 10,281.79.

S&P 500 index slid 9.78 or 0.5% to 1,951.26 and the Nasdaq Composite Index fell 22.73 or 0.05% to 4,800.35.

Crude oil in New York decreased 79 cents to $43.84 a barrel and gold added $4.10 to $1,107.40 an ounce.

U.S. Movers

Aquinox Pharmaceuticals Inc jumped 5.2% or 90 cents to $18.16 after the clinical stage pharmaceutical company’s shareholder Baker Brothers acquired 2.48 million shares at a price of $15.50 each.

The offer was as a part of the previously announced offering of 5.5 million shares.

Mylan NV rose 5 cents to $48.70 after the U.K.-focused pharmaceutical company made formal offer to acquire Ireland-based Perrigo Company Plc for $75 in cash and 2.3 Mylan shares for each share of Perrigo or about $27 billion.

Shareholders of Perrigo will own approximately 40% of the merged entity and the offer and withdrawal rights will expire on November 13.

Solera Holdings Inc soared 8.7% or $4.30 to $53.75 after the insurance industry software maker agreed to be acquired by an affiliate of private equity firm Vista Equity Partners for $6.5 billion, a premium of 53% to the closing price on August 3.

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

European Markets

European markets were on the defensive ahead of the U.S. Fed policy meeting later in the week.

Commodities and resources linked stocks led the decliners after another down day in oil and gold.

Industrial output in July rose 0.6% in the euro area and 0.3% in the wider region of EU28 from June. In June, production fell 0.2% in euro area and 0.1% in the wider region of EU28.

Compared to a year ago month, production in June increased 1.9% in the euro area and 1.8% in the wider region of EU28, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index fell 27.73 or 0.5% to 6,092.26 and in Frankfurt the DAX index gained 63.21 or 0.6% to 10,186.87.

In Paris, CAC 40 index slid 4.79 to 4,544.07.

Alcatel Lucent SA gained 2.4% to €3.17 after the Finland-based Nokia received an approval from the Committee on Foreign Investment in the United States for its proposed acquisition of the wireless transmission services provider.

Trinity Mirror Plc soared 7.4% to 149.30 pence after the U.K.-based news publishing company is in talk with rival Local World Holdings Limited for potential acquisition of the remaining stake to complete a takeover of regional newspaper group for about £200 million.

Asian Markets

Nikkei average in Tokyo dropped 1.6% following Asian markets decline after China reported weakening factory output and fixed-asset investments data over the weekend.

Shoei Foods, the dairy and confectionary maker said quarterly sales increased 9.1%.

Markets in Tokyo declined on the first trading day of this following weaker than expected economic data from China. Asian markets also eased after Shanghai index dropped more than 3%.

China said factory output in August rose at less than expected 6.1% and the pace of fixed-asset investment growth declined to 11%, still healthy compared to most developed economies.

The latest economic data over the weekend offered yet another evidence that China may not be able to deliver on its annual economic growth target of 7%.

The Nikkei 225 Stock Average slumped 298.52 or 1.6% to 17,965.70 and the broader Topix index dropped 17.82 or 1.2% to 1,462.41.

The yen strengthened to 120.26 against a dollar.

Toshiba Corporation slumped 2.1% to 314.80 yen after the diversified manufacturer reported net sales in the first-quarter ending in June dropped 4.2% from a year ago to 1.35 trillion yen from 1.41 trillion yen.

Net in the quarter swung to a loss of 12.3 billion yen compared to 16.7 billion yen and diluted loss per share swung to 2.90 yen from diluted earnings per share of 3.95 yen in the same period a year ago.

Toshiba said profit in the electronic devices and components business declined 13% to 35.6 billion yen and personal computers, televisions and appliances reported operating loss of 20.7 billion yen.

In addition, the Tokyo Stock exchange fined the conglomerate 91 million yen for accounting irregularities, The Stock Exchange said today.

Market indexes in Mumbai opened higher and latest read on wholesale index showed deepening price decline. The prices continued to decline across the board, largely on the sharp fall in fuel price of 16.5%.

The wholesale price index decline in August accelerated to 4.95% compared to the fall of 4.05% in July and 3.85% increase in the same month last year, the Ministry of Commerce & Industry reported.

Volatile vegetable prices declined by 21% but prices of pulses, staple for most families across the nation, rose by 36%.

Separately, the same ministry said annual rate of inflation measured in consumer price index in August fell to 3.66% from 3.69% in July and from 7.03% in a year ago month, on a revised base year. Rural inflation in August rose to 4.47% from 4.35% but urban inflation dropped to 2.67% from 2.94% in July.

Rupee strengthened 23 paisa to 66.31 against one U.S. dollar.

The Sensex Index advanced 246.49 or 0.9% to close at 25,856.70. The CNX Nifty increased 82.95 or 1.1% to 7,872.25.

JK Tyre is a step closer to acquire tire unit of Kesoram for $300 million.