Wall Street and European Markets Extend Rally, Brent Crude Struggles

Nichole Harper
23 Dec, 2015
New York City

Wall Street indexes extended gains for the third day in a row after crude rebounded from an 11-year low and personal income increased and durable goods orders were unchanged. European markets closed higher on bargain hunting.

[R]11:45 AM New York City, New York – Wall Street indexes extended gains for the third day in a row after crude rebounded from an 11-year low and personal income increased and durable goods orders were unchanged. European markets closed higher on bargain hunting.[/R]

Market indexes on Wall Street rallied for the third day in a row led by a rebound in energy stocks and rising personal income highlighted bright side of the economy.

Durable goods orders in November unchanged at $238.8 billion following two consecutive monthly increases, followed by 2.9% increase in October.

Orders excluding transportation rose 0.4% and defense dropped 1.5%, the Department of Commerce reported.

Separately, the department said personal income in November increased 0.3% and disposable personal income rose 0.3%. Personal consumption expenditure grew 0.3% in the month.

In October personal income rose 0.4%, DPI increased 0.4% and PCE gained less than 0.1% on revised estimate.

In a separate report the same department said seasonally adjusted new home sales in November jumped 4.3% to 490,000 from the revised October rate of 470,000 and soared 9.1% from a year ago month to 449,000.

The median sale price of new homes sold in the month was $305,000 and average price was $374,900.

On Wall Street, Tollbooth Strategy Index gained 35.10 or 0.3% to 10,803.96.

S&P 500 index increased 18.21 or 0.9% to 2,056.93 and the Nasdaq Composite Index rose 32.56 or 0.7% to 5,033.47.

Crude oil in New York jumped $1.18 to $37.32 a barrel and gold fell $2.78 to $1,069.65 an ounce.

U.S. Movers

Bed Bath & Beyond Inc ((BBBY)) plunged 5.5% or $2.83 o $48.49 after the home furnishings retailer lowered net sales forecast for the third-quarter to edged up 0.3% from a year ago to $3 billion while comparable sales to decrease by 0.4%.

The home furnishings retailer also lowered its diluted earnings per share forecast in the range of $1.07 to $1.10 compared to earlier estimated range of $1.14 to $1.21 per share.

Nike Inc ((NKE)) jumped 2.8% or $3.69 to $135.54 after the athletic footwear, apparel, equipment maker reported revenues in the second-quarter ending in November jumped 4% from a year ago to $7.69 billion.

Net income in the quarter surged 20% to $785 million or 90 cents per diluted share compared to $655 million or 74 cents per share from the same quarter last year.

Nike said revenues in China soared 24% while revenues in North American jumped 9.4%.

Paychex, Inc ((PAYX)) rose 22 cents to $52.93 after the outsourcing services provider said revenues in the second-quarter ending in November soared 7% from a year ago to $722.4 million.

Net income in the quarter jumped 9% to $189.2 million or 52 cents per diluted share compared to $173 million or 47 cents per share from the same quarter last year.

The company said revenue in payroll service segment rose 4% to $427.4 million and revenue in human resource services business increased 11% to $283.9 million

Paychex forecasted total service revenue for the year to jump between 7% and 8% and net income to increase in the range of 8% to 9%.

European Markets

European stocks advanced on Wednesday following a rebound in commodity stocks and ahead of quieter holiday trading.

Bargain hunters snapped up oil and mining companies trading at near three-year lows as copper, oil, iron ore and coal decline more than 40% in the year and extend losses for the third year in a row.

European markets are scheduled to close early on Thursday and will be shut on Friday and in addition the U.K. markets will remain closed on Monday for Boxing Day.

Glencore surged 6.3%, Anglo American soared 8.4% and the steel producer ArcelorMittal advanced 2.8%

In energy stocks, Tullow Oil shot up 7.5% and Repsol added 6.2%.

Brent Crude rebounded 67 cents to $36.79 a barrel after touching as low as $35.97 in the previous session, lowest since 2004 and dipping for the first time in many years below the price for the West Texas Intermediate crude.

In London trading, FTSE 100 index soared 133.85 or 2.2% to 6,216.90 and in Frankfurt the DAX index advanced 200.13 or 1.9% to 10,689.15.

In Paris, CAC 40 index jumped 92.59 or 2% to 4,661.57.

Game Digital Plc tumbled 38.7% to 126.08 pence after the U.K.-based video games retailer said revenue in the twenty-one week period ending on December 19 dropped 6.7% from a year ago to £466.8 million, mainly due to the decline in sales of older games.

Total sales of video games in the U.K. market plunged 13.5% and gross trading margin dropped 4.8% to £73.9 million from the same period a year ago.

While sales of the newer Xbox One and PlayStation 4 software soared 19.9% to £114.6 million, growth was offset by an unexpectedly high decline in Xbox 360 and PlayStation 3 content sales, which slumped 56.7% to £23.4 million.

Video console sales in the period tumbled 28.3% to £98.7 million.

Asian Markets

Markets in Japan were closed today in observance of Emperor's Birthday.

Stocks in Mumbai traded higher and the Sensex index jumped 1% at close after the rupee advanced for the sixth session in a row and reached to a level not seen since November 20.

Rupee strengthened 9 paisa to ₹66.23 against one U.S. dollar.

The Sensex Index increased 259.65 or 1% to close at 25,850.30. The CNX Nifty gained 79.85 or 1% to 7,865.95.

Wipro agreed to acquire Viteos Group for about $130 million. L&T secured orders worth ₹1,178 crore in December.

Tata Steel is in talks to sell its U.K.-based steel unit to a private equity firm.