News Column

Wall Street Pauses Ahead Of More Earnings, Data

July 17, 2014

WASHINGTON (Alliance News) - The mood on Wall Street has turned subdued after strong economic and earnings data propelled the domestic markets higher yesterday. The major US index futures are pointing to a slightly lower opening on Thursday. Asian stocks closed mostly lower earlier in the global trading day amid US rate hike concerns, while the European markets are also seeing weakness. The domestic markets could react to another raft of earnings released yesterday after the markets closed and scheduled before the market open today and economic data on housing starts, jobless claims and the manufacturing sector.

At 6:15 am ET, the Dow futures are slipping 38 points, the S&P 500 futures are receding 7.50 points and the Nasdaq 100 futures are moving down 12.50 points.

US stocks advanced moderately on Wednesday, thanks to a slew of positive economic data and earnings.

On the economic front, the Commerce Department is scheduled to release its housing starts report for June. Economists expect housing starts to come in at a seasonally adjusted annual rate of 1.026 million units compared to a 1.001 million annual unit rate in May. At the same time, building permits are expected to come in at 1.038 million units, bigger than the 991,000 units in the previous month. The Labor Department is due to release its jobless claims report for the week ended July 13th at 8:30 am ET. Economists expect claims to increase to 310,000 from 304,000 in the previous week.

The Philadelphia Federal Reserve is due to release the results of its regional manufacturing survey at 10 am ET. The consensus estimate calls for a decline in the diffusion index of manufacturing activity to decline to 16.9 in July from 17.8 in June. St. Louis Federal Reserve Bank President James Bullard is scheduled to speak on the economy and monetary policy in Owensboro, Kentucky at 1:35 pm ET.

In corporate news, eBay (EBAY) reported better than expected second quarter results, while its revenues were slightly shy of estimates. The company's third quarter guidance was weak and its full year guidance was tepid. United Rentals (URI) reported second quarter results that beat estimates and it raised its full year revenue guidance.

Yum Brands!'s (YUM) first quarter results trailed estimates, while the company reaffirmed its full year earnings per share growth guidance of at least 20%. SanDisk (SNDK) reported better than expected second quarter results. Select Comfort (SCSS) also reported second quarter results that were ahead of expectations. However, the company's 2014 earnings guidance trailed estimates.

Las Vegas Sands (LVS) reported second quarter earnings and revenues that were below estimates.

AMD (AMD), Capital One (COF), Google (GOOG), IBM (IBM), Resources Connect (RECN), Schlumberger (SLB), Seagate Technology (STX) and Skyworks (SWKS) are among the companies due to release their quarterly results after the close of trading.

Liberty Global (LBTYA) said it has acquired 259.9 million shares of ITV from British Sky Broadcasting for 481 million pounds, giving Liberty a 6.4% stake in ITV. Danaher (DHR) announced that its Beckman Coulter unit has agreed to buy the clinical microbiology business of Siemens Healthcare Diagnostics.

The major Asian markets closed mostly lower on a lackluster day, as fears of early monetary policy normalization by the Federal Reserve gripped traders following a flurry of positive earnings and economic data.

Japan'sNikkei 225 average ended down 9.04 points or 0.06% at 15,370. Export stocks moved mostly to the downside. China's Shanghai Composite Index ended 11.68 points or 0.57% lower at 2,056 and Hong Kong'sHang Seng Index ended at 23,521, down 2.41 points or 0.01%. Meanwhile, Australia's All Ordinaries ended up 5.40 points or 0.10% at 5,510.

On the economic front, a report released by the Conference Board showed that its leading index for Australia rose 0.2% month-over-month in May following a 0.2% drop in April.

European stocks opened lower amid some profit taking following yesterday's gains as the US and EU slapped fresh sanctions on Russia.Nevertheless, the averages have recouped some of the losses, as traders react to some positive domestic earnings.

In corporate news, Germany'sSAP AG reported a decline in its second quarter profit, although the company raised its cloud applications revenue guidance for the full year. Novartis (NVS) reported second quarter adjusted earnings that trailed estimates but the company confirmed its full year guidance. Carrefour reported higher sales for its second quarter. Anglo American's second quarter iron ore and copper production increased year-over-year.

On the economic front, data released by the European Automobile Manufacturers Association showed that new passenger car registrations in Europe grew 4.5% year-over-year in June, the same rate of growth as in May. Nonetheless, registrations totaled only 1.18 million units, which was the second lowest level reached for June since ACEA began the series in 2003 with the enlarged EU.

Eurozone inflation held steady at 0.5% in what the European Central Bank calls the danger zone, as initially estimated in June, final data from Eurostat showed. Prices gained only 0.1% from the previous month.

Eurozone construction output fell 1.5% in May after increasing 0.4% in the previous month, which was revised down from 0.8% reported initially, figures from Eurostat showed.

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Source: Alliance News

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