Citigroup Earnings Spark Rally on Wall Street, Reported Inflation Weak

Nichole Harper
15 Oct, 2015
New York City

Stocks on Wall Street rose and financials led the market indexes higher by 1% or more. Citigroup rose 4% after the third-largest bank reported strong earnings. Nike Inc surged on better revenues outlook and Netflix plunged 8% on weaker-than-expected U.S. subscriber additions.

[R][5:50 PM New York City, New York – Stocks on Wall Street rose and financials led the market indexes higher by 1% or more. Citigroup rose 4% after the third-largest bank reported strong earnings. Nike Inc surged on better revenues outlook and Netflix plunged 8% on weaker-than-expected U.S. subscriber additions.[/R]

Market indexes on Wall Street rebounded after Citigroup reported strong earnings and the measured inflation was tame.

Seasonally adjusted weekly jobless claims dropped 7,000 to 255,000 from the previous week’s revised claims of 262,000, the Department of Labor said.

Separately, the department said the consumer prices index in September decreased 0.2% from August.

For the year, all item index before seasonal adjustment was unchanged. The food index rose 0.4% and energy index dropped 4.7% while gasoline index declined 9% followed by 4.1% decrease in August.

On Wall Street, Tollbooth Strategy Index increased 53.22 or 0.5% to 10,507.41.

S&P 500 index rose 12.33 or 0.6% to 2,006.57 and the Nasdaq Composite Index added 34.32 or 0.7% to 4,817.17.

Crude oil in New York fell 58 cents to $46.06 a barrel and gold rose $1.77 to $1,185.90 an ounce.

U.S. Budget Deficit Narrows

U.S. budget deficit narrowed to the lowest level since 2008 as the government receipts bounce back and the spending remains in check.

The fiscal 2015 budget deficit declined to $439 billion or 2.5% of gross domestic product from $483 billion or 2.8% in fiscal 2014.

Revenues in the fiscal year increased 8% to $3.249 trillion and spending increased 5% to $3.688 trillion.

The deficit has come down substantially after the government ramped up spending during the financial crisis years and recorded at least $1 trillion or more in each of fiscal years between 2009 and 2012.

U.S. Movers

Citigroup Inc ((C)) soared 3% or $1.54 to $52.26 after the financial services provider reported total revenues in the third-quarter ending in September plunged 5.4% from a year ago to $18.69 billion.

Net income in the quarter surged 53.6% to $4.29 billion or $1.35 per diluted share compared to $2.84 billion or 88 cents from the same quarter last year.

The bank said legal and related costs in the quarter declined to $376 million from $1.6 billion a year earlier and operating expenses plunged 18% as the bank exited businesses with no prospects of profits.

Deposits in the quarter dropped 4% to $904 billion and total loans plunged 5% to $622 billion.

Goldman Sachs Group Inc ((GS)) rose 1.3% or $2.24 to $181.99 after the bank and brokerage services provider said total revenues in the third-quarter ending in September declined 18% from a year ago to $6.86 billion.

Net income in the quarter tumbled 38% to $1.33 billion or $2.90 per diluted share compared to $2.14 billion or $1.98 from the same quarter last year.

As of September, total assets increased 2% to $881 billion and global core liquid assets were $193 billion.

European Markets

In London trading, FTSE 100 index increased 76.79 or 1.2% to 6,345.89 and in Frankfurt the DAX index gained 167.99 or 1.7% to 10,083.84.

In Paris, CAC 40 index jumped 73.87 or 1.6% to 4,682.87.

Repsol SA slumped 3% to €11.80 after the Spain-based oil and gas producer plans to sell assets worth about €6.2 billion or $7.1 billion between 2016 and 2020 and reduce the exploration and production investments for about 40% in the next five-years.

The energy explorer plans to use proceeds to repay the debt.

Tesco Plc fell 0.1% to 192.25 pence and the U.K.-based retailer agreed to sell of fourteen Spenhill development sites in London, the South East and Bath to a fund and clients advised by Meyer Bergman for about £250 million for mixed-use and residential development.

Unilever Plc jumped 3.4% to 2,884 pence after the U.K.-based food, home and personal care products maker reported revenues in the third-quarter ending in September soared 9.4% from a year ago to €13.4 billion.

The company’s sales in personal care products jumped 5.1% and sales in food segment advanced 3.1%. Sales in refreshment business increased 2.7% while homecare sales rose 2.5%.

Asian Markets

Bargain hunters lifted the Nikkei average from the negative zone and the benchmark index closed above 18,000 on the Tokyo Stock Exchange.

Stocks were supported by a strength in Chinese stocks in Shanghai trading.

On the economic front, industrial output in August declined 1.2% from July, higher than the initially estimated to fall 0.5%, the Ministry of Economy, Trade and Industry said.

The Nikkei 225 Stock Average increased 205.90 or 1.2% to 18,096.90 and the broader Topix index gained 19.89 or 1.4% to 1,490.72.

Nikkei and Topix closed up after a 3-day sell-off and in the first section of the TSE 1,609 shares rose and 223 declined while 68 shares closed unchanged.

The yen strengthened to 118.45 against a dollar.

FamilyMart Co Ltd gained 0.9% to 5,300 yen after the convenience store operator agreed to acquire smaller rival UNY Group Holdings Co through a share swap deal for about $1.4 billion.

Stocks in Mumbai traded higher in active trading and financials were in focus.

Rupee strengthened 21 paisa to 64.83 against one U.S. dollar.

The Sensex Index jumped 230.40 or 0.9% to close at 27,010.14. The CNX Nifty gained 71.60 or 0.9% to 8,179.50.

Total exports in September declined 24.3% to $21.84 billion and slid 17.7% in rupees, according to the government agency in India.

Imports in the month dropped 25.4% to $32.32 billion and fell 18.9% in rupees.

The trade deficit in September narrowed to $10.48 billion from $14.47 billion in a year ago month.

Adani group received an approval from Australian government for Carmicheal coal mine and rail project with 36 conditions.