News Column

Wall Street On Back Foot Amid Caution

June 27, 2014

WASHINGTON (Alliance News) - With very little catalysts to drive trading, Wall Street may open little changed on Friday. A consumer sentiment data due shortly after the markets open, the direction of oil prices and some earnings news out after the market close yesterday could provide some direction to the markets, although they might not be strong enough to provide a meaningful thrust to the markets. Global cues are mixed, with Asian stocks closing mostly lower, while the European markets are advancing after seeing nervous moments in early trading.

At 6:15 am ET, the Dow futures are slipping 22 points, the S&P 500 futures are receding 3.75 points and the Nasdaq 100 futures are declining 5.75 points.

US stocks declined on Thursday amid the release of economic data on jobless claims and consumer spending.

On the economic front, Reuters and the University of Michigan are scheduled to release their final consumer sentiment reading for June at 9:55 am ET. Economists expect the index to be upwardly revised to 81.9 from 81.2 in May.

In corporate news, Nike (NKE) reported fourth quarter earnings from continuing operations of USD7.4 billion, up 3% year-over-year/ Revenues from continuing operations climbed 11% to USD7.4 billion. The results exceeded estimates. The company also noted that worldwide futures orders at the end of the quarter were up 11% year-over-year.

DuPont (DD) lowered its operating earnings per share guidance for the second quarter and the full year, citing lower than expected quarterly performance of its agriculture and to a less extent, performance chemicals segment. The company now expects operating earnings to be below the USD1.28 per share recorded in the year-ago period. The company also downwardly revised its full year operating earnings per share guidance to USD4 to USD4.10. The guidance trailed expectations.

Progress Software (PRGS) reported second quarter non-GAAP earnings from continuing operations of 37 cents per share, higher than 27 cents per share last year. Revenues from continuing operations eased to USD80.8 million from USD81.7 million last year. For the full year, the company expects non-GAAP earnings of USD1.38-USD1.45 per share on revenues of USD331 million to USD338 million. The results exceeded estimates and the guidance was positive.

Citrix Systems (CTXS) announced that its President and CEO Mark Templeton will not retire next year, as previously announced. The company also said Robert Calderoni will join the company's board, effective immediately.

Liberty Global (LBTYA) announced a recommended public offer for all issued and outstanding shares of Dutch cable operator Ziggo it does not own already in a cash and stock deal. Each of Ziggo shareholders will receive 11euro per share in cash, 0.2282 Liberty Class A ordinary share and 0.5630 Liberty Class C ordinary shares for each share Ziggo share they hold.

Expedia (EXPE) announced an agreement to buy European online car rental reservation company AutoEscape. While stating that the deal is expected to close during the third quarter, Expedia did not disclose additional terms.

Most Asian markets declined, dragged lower by the negative lead from Wall Street overnight. Hawkish comments by a Fed official concerning an early rate hike also weighed in the minds of investors even as mixed economic data did not give a clear picture concerning the economic recovery in the US

The Japanese market ended down 213.49 points or 1.39% at 15,095. A majority of stocks moved to the downside, led by Toyobo, Okuma, Nitto Boseki, NH Foods and Toho Zinc. Australia's All Ordinaries lost 17.70 points or 0.32% before closing at 5,429. China's Shanghai Composite Index ended at 2,037, down 2.17 points or 0.11%. Meanwhile, Hong Kong'sHang Seng Index ended up 23.69 points or 0.10% at 23,222.

On the economic front, a report released by Japan'sMinistry of Internal Affairs and Communications showed that core annual inflation in the UK accelerated to 3.4% in May from 3.2% in April. The rate was in line with expectations. A separate report showed that the average household spending in Japan declined 8% year-over-year in May, steeper than the 2.1% drop expected by economists. Meanwhile, the jobless rate in Japan eased 0.1 points to 3.5%.

After seeing some volatility in early trading, European stocks have moved higher in late morning trading. EU leaders are meeting in Brussels to discuss the candidature of Jean-Claude Juncker as the president of the European Commission. The leaders are also scheduled to discuss the developments in Ukraine.

On the economic front, the results of a survey by Hometrack showed that UK house prices rose at a slower rate in May. The results of GfK's consumer confidence survey for the UK showed an improvement in confidence among UK consumers.

French statistical office INSEE confirmed the stagnant economic performance for its first quarter following a 0.2% increase in the fourth quarter. A separate report showed that French producer prices continued to drop in May. Another report showed that household spending in France rose a better than expected 1% month-over-month in May, boosted by higher spending on energy products.

UK's first quarter sequential GDP growth was confirmed at 0.8%, according to revised estimates released by the UK Office for National Statistics. The year-over-year growth was downwardly revised to 3% from 3.1%.

Eurozone economic confidence weakened unexpectedly in June from a 34-month high in May, survey results from the European Commission showed. The economic sentiment index fell to 102 from a revised 102.6 in May. Economists expected the headline index to rise to 103.

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Source: Alliance News

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