News Column

Wall Street Treads Cautious Line Despite Intel's Forecast

June 13, 2014

WASHINGTON (Alliance News) - The trading in the US index futures suggests that Wall Street stocks may open slightly lower on Friday, as the trading week draws to a close. Asian stocks closed mixed amid mixed catalysts, while the European markets are trading on a weak note. Chipmaker Intel announced after the markets closed on Thursday that it is upgrading its second quarter forecasts on a strong business PC market. Meanwhile, the domestic markets may also focus on a private consumer sentiment data due to be released shortly after the markets open. Meanwhile, crude oil had firmed up further, as geopolitical concerns stirred up by the unrest in Iraq intensify, with the US threatening of air strikes against the Sunni Islamic militants.

At 6:15 am ET, the Dow futures are down 15 points, the S&P 500 futures are declining 1.50 points and the Nasdaq 100 futures are losing 1.25 points.

US stocks extended their slide on Thursday amid the release of lukewarm economic data.

On the economic front, the Labor Department is scheduled to release its report on producer prices at 8:30 am ET. Economists expect the producer price index for final demand as well as the core producer price index for final demand to increase by 0.1% each.

Reuters and the University of Michigan are due to release the preliminary estimate of its consumer sentiment index for June at 9:55 am ET. The consumer sentiment index is expected to increase to 83 from 81.9 in May.

In corporate news, Intel (INTC) raised its second quarter guidance, citing stronger than expected demand for business PCs. The company now expects second quarter revenues to be at USD13.7 billion, plus or minus USD300 million, up from its previous guidance of USD13 billion, plus or minus USD500 million. The company also lifted its gross margin guidance. For the year, the company now expects some revenue growth compared to its previous estimate for flat revenues.

C.R. Bard (BCR) announced that the FDA Circulatory, System Devices Advisory Panel provided a unanimous favorable recommendation to FDA for the use of Lutonix drug coated balloon PTA Catheter in the US The company noted that the FDA will consider the recommendation in its review of the PMA application submitted by it in November 2013. The major Asian markets closed mixed, as traders reacted to the negative lead from Wall Street, the Bank of Japan's monetary policy announcement, a slew of data from China and upbeat forecasts issued by Intel.

The Japanese market advanced, taking cues from a weaker yen, which reacted to an unchanged monetary policy stance of the Bank of Japan. The Nikkei 225 average opened lower and traded sideways below the unchanged line. Following the monetary policy announcement, the index recovered in late trading and advanced thereafter, ending up 124.31 points or 0.83% at 15,098. Export, resource and bank stocks advanced, while insurance, real estate, rail utilities and construction machinery makers came under selling pressure.

Australia's All Ordinaries languished below the unchanged line throughout the session before closing down 24.20 points or 0.45% at 5,384. A majority of stocks declined, although energy stocks received strong support from rallying oil prices.

Hong Kong'sHang Seng Index ended at 23,319, up 144.15 points or 0.62%, and China's Shanghai Composite Index added 19 points or 0.93% before closing at 2,071.

On the economic front, the Bank of Japan announced that it is maintaining its monetary policy unchanged, while it raised its assessment of growth in overseas economies. The bank left its target of raising the monetary base at an annual pace of 60-70 trillion yen unchanged.

A report released by Japan'sMinistry of Economy, Trade and Industry showed that industrial output in Japan declined 2.8% month-over-month in April, a faster rate of decline than the preliminary estimate of a 2.5% fall. In March, production had risen 0.7%. On a year-over-year basis, industrial output rose by a revised 3.8%, down from the preliminary estimate of a 4.1% rise.

A trio of data released by the Chinese National Bureau of Statistics showed that economic momentum in China is still intact. Industrial output rose 8.8% year-over-year in May following an 8.7% increase in April. The increase was in line with estimates. The retail sales growth of 12.5% exceeded expectations for a 12.1% increase. Fixed asset investment in the January-May period rose 17.2%, in line with estimates.

European stocks have opened lower and have seen further downside since then.

On the economic front, final estimates released by the Federal Statistical Office of Germany showed that consumer prices rose 0.9% year-over-year, in line with estimates, marking the slowest increase since June 2010. The HICP annual inflation was at 0.6%, the slowest increase since February 2010.

While Eurozone employment grew for the second straight quarter in the first three months of the year, the euro area's trade surplus widened in April compared with the same month a year earlier, figures from Eurostat showed.

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Source: Alliance News

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