S&P 500 Drops on Another Dive in Crude Oil

Nichole Harper
21 Oct, 2015
New York City

Stocks on Wall Street struggled after mixed earnings report and energy complex drifted lower after a weak weekly inventory report. Crude oil plunged to a three-week low. The $30 billion worth of two deals in technology hardware brought KLA and Lam Research and Western Digital and SanDisk together.

[R][6:10 PM New York City, New York – Stocks on Wall Street struggled after mixed earnings report and energy complex drifted lower after a weak weekly inventory report. Crude oil plunged to a three-week low. The $30 billion worth of two deals in technology hardware brought KLA and Lam Research and Western Digital and SanDisk together.[/R]

Stocks on Wall Street eased as investors digested latest batch of earnings and crude oil prices declined for the second day in a row.

U.S. crude inventory report released by the government suggested a continued increase in supply of new crude oil. The latest weekly inventory report knocked the price of U.S. crude oil by 2% to $45.20 a barrel and dropped to a three-week low of $44.86 in trading.

On Wall Street, Tollbooth Strategy Index slipped 66.45 or 0.4% to 10,597.30.

S&P 500 index fell 7.04 or 0.3% to 2,023.49 and the Nasdaq Composite Index slid 25.07 or 0.5% to 4,855.71.

Crude oil in New York slipped $1 to $45.29 a barrel and gold dropped $7.97 to $1,168.07 an ounce.

U.S. Movers

Boeing Co ((BA)) jumped 2% or $2.80 to $141.68 after the aerospace company reported revenues in the third-quarter ending in September advanced 7% from a year ago to $25.85 billion.

Net income in the quarter surged 25% to $1.70 billion or $2.47 per diluted share compared to $1.36 billion or $1.86 from the same quarter last year.

General Motors Company ((GM)) surged 6.3% or $2.11 to $35.59 after the car maker reported total revenues in the third-quarter ending in September fell 1.3% from a year ago to $38.8 billion.

Net income in the quarter was flat at $1.4 billion from a year ago period and diluted earnings per share rose to 84 cents from 81 cents from the same quarter last year.

The Coca-Cola Co ((KO)) rose 13 cents to $42.45 after the non-alcoholic beverages maker reported total revenues in the third-quarter ending in September dropped 5% from a year ago to $11.43 billion.

Net income in the quarter declined 31% to $1.45 billion or 33 cents per diluted share compared to $2.11 billion or 48 cents from the same quarter last year.

KLA-Tencor Corp ((KLAC)) surged 22.5% or $12.11 to $65.97 after the integrated circuit equipment supplier agreed to be acquired by Lam Research Corporation for $67.02 per share or $10.6 billion.

Lam Research Corporation stock jumped 6.1% to $74.29.

Separately, the company said revenues in the first-quarter ending in September were nearly flat from a year ago to $642.64 million.

Net income in the quarter soared 45.2% to $104.9 million or 66 cents per diluted share compared to $72.2 million or 43 cents from the same quarter last year.

SanDisk Corporation ((SNDK)) jumped 2.8% or $2.13 to $77.32 after the flash storage solutions provider said revenues in the third-quarter ending on September 27 plunged 17% from a year ago to $1.45 billion.

Net income in the quarter tumbled 49.4% to $133 million or 65 cents per diluted share compared to $263 million or $1.09 from the same quarter last year.

Western Digital Corp ((WDC)) slumped 3.7% or $2.74 to $72.12 after the hard drives maker stated preliminary revenues information for the first-quarter ending on October 2 of about $3.4 billion from a year ago and net income of $283 million, or $1.21 per share.

Separately, the company today agreed to acquire SanDisk Corporation for about $19 billion in a cash-and-stock deal.

Under the terms, SanDisk shareholders will receive $86.50 per share in cash and stock, a 15% premium to the closing price on Tuesday.

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

European Markets

In London trading, FTSE 100 index edged up 3.29 to 6,348.42 and in Frankfurt the DAX index gained 90.42 or 0.9% to 10,238.10.

In Paris, CAC 40 index increased 21.29 or 0.6% to 4,695.10.

Credit Suisse Group AG, the Switzerland-based financial services provider reported net revenues in the third-quarter ending in September plunged 8% from a year ago to $5.16 Swiss francs.

Net income in the quarter tumbled 24% from a year ago to 779 million francs compared to 1.03 billion francs and diluted earnings per share slipped to 0.45 francs from 0.55 francs.

Separately, today the bank plans for capital raise of about 6 billion Swiss francs or $6.28 billion through offering of new shares and also intends to reduce the number of staff in Switzerland by a net 1,600 in three-years and cut the number of its investment bank staff in London.

Fiat Chrysler Automobiles plunged 5.3% to €13.47 after the global vehicle maker priced the initial public offering of 17.18 million shares of Ferrari for $52 per share.

Asian Markets

Nikkei average surged nearly 2% and September month trade deficit plunged but exports increase was lower-than-expected fuelling speculation of another round of stimulus from the government or the central bank.

The merchandise trade deficit in September plunged 88.1% to of 114.5 billion yen compared to deficit of 961.98 billion yen in a year ago month, the Ministry of Finance said.

Export in September rose 0.6% to 6.42 trillion yen while import in the month tumbled 11.1% to 6.53 trillion yen from 7.34 trillion yen in the same month a year ago.

The Nikkei 225 Stock Average jumped 347.13 or 1.9% to 18,554.28 and the broader Topix index increased 27.53 to 1,526.81.

The yen strengthened to 120.03 against a dollar.

Nidec Corporation jumped 2.8% to 8,834 yen after the electric motors and equipment maker said net sales in the first-half ending in September soared 20% from a year ago to 587.35 billion yen.

Net income in the period surged 29.7% to 47.62 billion yen compared to 36.71 billion yen and diluted earnings per share rose to 159.57 yen from 124.85 yen.

Separately, today the company agreed to acquire the U.S.-based privately-owned motor controls producer KB Electronics for an undisclosed sum.

Tokyo Electric Power Co Inc gained 1.3% to 843 yen after the electric power supplier plans to issue corporate bonds in April 2016 to raise 330 billion yen, after shift to a holding company which formed three subsidiaries.

The bonds will be issued by the power transmission and distribution unit.

The Sensex Index fell 19.17 to close at 27,287.66. The CNX Nifty slid 9.95 to 8,251.87.

Rupee weakened 7 paisa to 65.12 against one U.S. dollar.

HDFC Bank Limited edged down 0.03% to ₹1,094.80 after the lender said net in the second-quarter jumped 20.5% from a year ago to ₹2,869.45 crore.

Total revenues in the quarter soared 24.7% to ₹17,324.28 crore.

The lender added ratio of gross non-performing assets in the quarter fell 0.91% from 0.95% in June quarter and 1.02% in a year ago period.

The ratio of net non-performing assets in the quarter slid 0.25% from 0.27% in June quarter and 0.28% in the same period last year.

Hero MotoCorp Limited rose 0.5% to ₹2,619.05 after the largest motorcycle maker said net in the second-quarter increased 1.1% from a year ago to ₹772.06 crore.

Net revenues in the quarter slipped 2.4% to ₹6,939.68 crore.