Fed Minutes Suggest Possible Rate Hike This Year

Nichole Harper
08 Oct, 2015
New York City

U.S. stocks turned around in the afternoon and most Fed policymakers are still looking to raise rate this year according to the latest minutes. Netflix raised monthly subscription rate for some new members. Amazon.com Inc expanded its store to include more handmade goods.

[R][3:40 PM New York City, New York – U.S. stocks turned around in the afternoon and most Fed policymakers are still looking to raise rate this year according to the latest minutes. Netflix raised monthly subscription rate for some new members. Amazon.com Inc expanded its store to include more handmade goods.[/R]

U.S. market indexes turned around in late afternoon and most Fed policymakers last month still held out for a rate hike this year.

The latest Fed minutes of meeting held of Sept 16-16 released on Thursday showed that the last month rate decision was a close call and most policymakers are still looking to support a rate hike before the year is over.

Markets were surprised after the Fed left its rate unrevised at the September meeting. The committee members focused on the downside to the U.S. economy by the signs of turmoil abroad.

Since the meeting, additional economic data have raised the prospect of increased risks of downturn in the U.S. economy.

Seasonally adjusted weekly jobless claims dropped 13,000 to 263,000 from the previous week revised claims of 276,000, the Department of Labor said.

On Wall Street, Tollbooth Strategy Index slipped 66.12 or 0.6% to 10,397.72.

S&P 500 index rose 5.74 or 0.3% to 2,001.23 and the Nasdaq Composite Index fell 14.77 or 0.3% to 4,776.70.

Crude oil in New York increased $1.63 to $49.44 a barrel and gold gained $4.46 to $1,150 an ounce.

U.S. Movers

Biomed Realty Trust Inc ((BMR)) surged 8.7% or $1.88 to $23.46 after the real estate developer agreed to be acquired by Blackstone Real Estate Partners VIII for $23.75 per share in cash or $8 billion, a premium of 24% to the closing price of September 22 or 10% premium to closing price of October 7.

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

Buckle, Inc ((BKE)) plunged 6.2% or $2.39 to $35.89 after the casual apparel, footwear and accessories retailer said comparable store sales for the five-week period ending on October 3 declined 6.7%.

Net sales in September slumped 5.6% to $97.4 million from $103.1 million a year ago month.

Cato Corporation ((CATO)) soared 5.1% or $1.80 to $37.26 after the women''''s fashion retailer reported same-store sales for the five-weeks ending on October 4 increased 2%.

Total sales in September jumped 4% to $83.2 million from the same month of a year ago.

Cato lifted earnings per share forecast for the third-quarter in the range of 18 cents to 22 cents from earlier estimated range of 12 cents to 16 cents per share.

Dell Inc, the computer maker is in talks to acquire EMC Corp without disclosing financial terms.

EMC Corporation, the data storage company stock jumped 4.9% to $27.24.

Domino''s Pizza, Inc ((DPZ)) declined 4.4% or $4.76 to $103.27 after the pizza retail chain reported revenues in the third-quarter ending in September jumped 8.5% from a year ago to $484.7 million.

Domestic same store sales in the quarter surged 10.5% and international division same store sales advanced 7.7%.

Net income in the quarter soared 7.8% to $37.8 million or 67 cents per diluted share compared to $35.6 million or 63 cents from the same quarter last year.

Gannett Co Inc ((GCI)) increased 2.1% or 32 cents to $15.26 after the media and marketing company agreed to acquire rival Journal Media Group for $12 per share or about $280 million in cash, representing a premium of 44.6% to the closing price on October 7.

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

Journal Media Group Inc stock surged 43.3% to $11.89.

European Markets

In London trading, FTSE 100 index rose 23.13 or 0.4% to 6,359.07 and in Frankfurt the DAX index gained 30.87 or 0.3% to 10,002.46.

In Paris, CAC 40 index increased 7.80 or 0.2% to 4,676.43.

Deutsche Bank AG rose 0.3% to €25.57 after the Germany-based investment bank reported that it will book net loss for the third-quarter of about €6.2 billion for a write down related to its corporate banking unit.

The bank said the core of the anticipated loss is due to higher regulatory requirements cost to get rid of its former subsidiary, Postbank

The bank also took approx $673 million write down linked to China based Hua Xia where it controls 19.99%

The bank is scheduled to release its third-quarter results on October 29.

Mondi Plc fell 0.8% to 1,447 pence after the U.K.-based packaging and paper group said operating profit for the third-quarter surged 27% to €221 million from €174 million in prior year period but declined 13% from the second-quarter.

Asian Markets

Nikkei average in Tokyo closed down and the yen remained in favour as investors focused on the latest corporate earnings.

The core machinery orders in August declined 5.7% after falling 3.6% in the previous month, the Cabinet Office said.

For the year, core machinery orders slumped 3.5% compared to 2.8% jump in the last month.

The current account surplus in August declined to 1.65 trillion yen from 1.81 trillion yen in July, the Ministry of Finance reported today.

The trade deficit in the month increased to 326.1 billion yen from 108 billion yen in previous month.

Export in August declined to 5.86 trillion yen form 6.54 trillion yen in July and import slumped to 6.18 trillion yen compared to 6.65 trillion yen in last month.

The Nikkei 225 Stock Average slumped 181.81 or 0.9% to 18,141.17 and the broader Topix index fell 11.77 to 1,481.40.

The yen strengthened to 119.75 against a dollar.

China-controlled state television network said today that Chinese yuan has surpassed the yen as the fourth most used currency in the world for daily transaction.

Fast Retailing Co Ltd dropped 2.3% to 48,640 yen after the apparel retailer reported net sales in the in the year ending in August soared 21.6% from a year ago to 1.68 trillion yen.

Net income in the year surged 47.6% to 110 billion yen compared to 74.55 billion yen and diluted earnings per share jumped to 1,078.08 yen from 730.81 yen.

The retailer forecasted net sales for the year to increase 13% to 1.90 trillion yen and net income to advance 4.5% to 115 billion yen.

The company booked impairment losses related to its J-Brand label and Uniqlo brand U.S. stores.

Seven & I Holdings Co., Ltd slumped 2.2% to 5,421 yen after the convenience stores operator said net sales in the in the first-half ending in August slid 0.3% from a year ago to 2.99 trillion yen.

Net income in the year rose 0.7% to 84.52 billion yen compared to 83.90 billion yen and diluted earnings per share gained to 95.51 yen from 94.82 yen.

The retailer forecasted net sales for the year to increase 1.8% to 6.15 trillion yen and net income to jump 5.8% to 183 billion yen.

Stocks in Mumbai slipped and investors prepared ahead of corporate earnings announcements next week.

World markets have been volatile and China slowdown continues to roil commodities markets. Crude oil traded lower after the latest U.S. inventories report suggested unexpected rise last week.

Rupee weakened 11 paisa to 65.09 against one U.S. dollar.

The Sensex Index slipped 190.04 or 0.7% to close at 26,845.81. The CNX Nifty fell 48.05 or 0.6% to 8,129.35.

Rajesh Exports received an export order from UAE. Adani Power and Welspun are in talks to sell power plants. MAN Industries India secured orders worth $110 million.