Worst Quarterly Decline in Four Years on Wall Street

Nichole Harper
30 Sep, 2015
New York City

Stocks on Wall Street rebounded and market indexes soared. S&P 500 index jumped 1.9% in active trading. U.S. Congress passed a stop-gap measure just hours before to avert a government shutdown. Fro the quarter, the S&P 500 index declined 6.9% and the Nasdaq dropped 7.4%.

[R]6:30 PM New York City, New York – Stocks on Wall Street rebounded and market indexes soared. S&P 500 index jumped 1.9% in active trading. U.S. Congress passed a stop-gap measure just hours before to avert a government shutdown.[/R]

Stocks and market indexes on Wall Street and rebounded after two days of decline and ahead of jobs report on Friday.

On Wall Street, Tollbooth Strategy Index jumped 100.51 or 1% to 10,057.

S&P 500 index gained 18.32 or 0.9% to 1,902.52 and the Nasdaq Composite Index increased 56.76 or 1.3% to 4,573.92.

Crude oil in New York rose 22 cents to $45.45 a barrel and gold dropped $12.26 to $1,115.17 an ounce.

U.S. Movers

Costco Wholesale Corporation ((COST)) gained 85 cents to $144.57 after the discount stores operator reported net sales in the fourth-quarter ending in August rose 1% from a year ago to $34.99 billion.

Comparable store sales in the quarter decreased 1%. Comparable sales in the U.S. jumped 2% while sales in Canada region declined 10% and international sales slumped 7%.

Net income in the quarter surged 10% to $767 million or $1.73 per diluted share compared to $697 million or $1.58 from the same quarter last year.

Pfizer Inc ((PFE)) increased 1.1% or 34 cents to $31.36 after the biopharmaceutical company lifted revenues forecast for the year after acquisition of hospital products maker Hospira Inc for about $15.2 billion.

Pfizer estimated revenues for the year in the range of $46.5 billion to $47.5 billion from the prior guidance of $45 billion to $46.5 billion.

The company lowered earnings per share forecast for the year between $1.29 and $1.38 from earlier estimated range of $1.38 to $1.47 per share.

Paychex, Inc ((PAYX)) gained 1.5% or 71 cents to $46.72 after the outsourcing services provider reported total revenues in the first-quarter ending in August jumped 8% from a year ago to $723 million.

Net income in the quarter soared 22% to $209.1 million or 58 cents per diluted share compared to $171.3 million or 47 cents from the same quarter last year.

Paychex forecasted revenues for the year to jump between 7% and 8% and net income to gain in the range of 8% to 9%.

European Markets

In the third estimate, U.K second-quarter GDP hold at 0.7% from 0.4% in first-quarter but fell from 2.6% in a year ago period, the Office of the National Statistics said.

Separately, the department said the seasonally adjusted UK service sector index jumped 2.8% in July from a year ago month. The largest contribution was from business services, finance, distribution, hotels and restaurants.

Between June and July output in service sector increased 0.2% after increase of 0.6% between May and June.

In August, seasonally adjusted unemployment rate in euro zone held at 11% and stable from July but fell from 11.5% in August 2014.

In the wider region of EU28, unemployment rate was 9.5% and stable from July but declined from 10.1% in August 2014, the Statistical Office of the European Communities reported.

In a separate report, the department said in a preliminary estimate the annual inflation in the euro area fell 0.1% in September compared from August.

In London trading, FTSE 100 index soared 130.61 or 2.2% to 6,040.09 and in Frankfurt the DAX index jumped 226.36 or 2.4% to 9,675.96.

In Paris, CAC 40 index surged 122.16 or 2.8% to 4,465.89.

For the month, FTSE 100 index declined 3.3% and the DAX index plummeted 6% and the CAC 40 index plunged 4.5%.

For the quarter, FTSE 100 index plunged 7.4% and the DAX index tumbled 11.6% and the CAC 40 index soared 18%.

From a year ago month, FTSE 100 index tumbled 8.8% and the DAX index jumped 2.2% and the CAC 40 index increased 1.1%.

British American Tobacco Plc jumped 3.2% to 3,633 pence after the tobacco products maker completed the acquisition of Croatia-based TDR d.o.o. and other assets from Adris Grupa for about €550 million.

Groupe Fnac SA declined 3.9% to €50.91 after the France-based cultural, leisure and technological products retailer made a takeover proposal to the U.K.-based electrical retailer Darty Plc and offered for one Fnac share in exchange of 39 Darty shares, valued at 101 pence per share or about £533 million.

J Sainsbury Plc surged 14.2% to 261.90 after the supermarkets and convenience stores operator said total retail sales for the second-quarter ending on September 26 increased 0.3% excluding fuel but dropped 1.8% including fuel while comparable retail sales slipped 1.1%.

Online grocery sales in the quarter soared 15% and clothing sales jumped 13% while Sainsbury’s Bank saw the best ever month for travel money in July with a 35% surge in transaction volumes.

For the year, the convenience stores operator estimated operating profit will be “moderately ahead of published consensus” of £548 million.

Asian Markets

Nikkei average in Tokyo surged on a technical rebound and investors overlooked the weak factory output and retail sales data. Japan Tobacco plunged 10% after the company agreed to an expensive purchase of brands from Reynolds America.

Stocks in Japan rebounded and reacted to international events ahead of economic data from China and local manufacturing sector survey.

The Bank of Japan is scheduled to release its tankan survey and China is scheduled to release its manufacturing survey on Thursday and the U.S. is scheduled to release its monthly jobs data on Friday.

On the economic front, retail sales in August rose 0.8% followed by 1.8% increase in July, the Ministry of Economy, Trade and Industry said.

On a seasonally adjusted basis monthly retail sales in August were flat compared to 1.4% decline in previous month.

In addition, factory output index showed a decline for the second month in a row in August and following the decline in June quarter.

The weak manufacturing data has only led to more speculation that the government or the central bank may offer additional stimulus and provide additional support to stocks.

The Nikkei 225 Stock Average surged 457.31 or 2.7% to 17,388.15 and the broader Topix index jumped 35.64 or 2.6% to 1,411.16.

For the month, Nikkei 225 plunged 9.2% and for the third-quarter tumbled 14.2% but soared 7% from a year ago month.

However, short selling ratio reached a new high of 43.4, according to the data released by the Japan Exchange Group.

The yen strengthened to 120.06 against a dollar.

Mizuho Financial Group Inc advanced 2.3% to 222.90 yen after the financial services provider agreed to acquire 16% stake in the U.S.-based Asia-focused fund manager Matthews International Capital Management LLC for about 23.9 billion yen or $200 million.

India settled price of natural gas with contractors at $3.82 per unit, 18% lower than the current price. India imports nearly 50% of its natural gas demand.

Market indexes in Mumbai jumped after markets across Asia closed higher and European markets traded higher.

The central government fixed the domestically produced natural gas price at $3.82 per million metric British thermal units (mmBtu) till March 2016, 18% lower than the current price.

Rupee strengthen 38 paisa to 65.58 against one U.S. dollar.

The Sensex Index jumped 376.17 or 1.5% to close at 26,154.83. The CNX Nifty increased 105.60 or 1.4% to 7,948.90.

For the month, Sensex Index slipped 0.9% and for the second-quarter plunged 6.5% and for the year decreased 1.8%.

For the month, CNX Nifty fell 0.7% and for the second-quarter declined 6.4% and for the year slid 0.3%.

The second largest wireless telecom operator RCom is in advanced talks with Reliance Jio to share spectrum.

Godrej Properties sold its Bandra-Kurla complex property to the largest drug maker Abbott India Ltd for nearly $200 million.