News Column

Wall Street Shows Resilience As FOMC Decision Looms

July 30, 2014

WASHINGTON (Alliance News) - Early indications suggest that Wall Street stocks may open slightly higher ahead of another earnings onslaught, although only a handful of these are significant enough to impact the market mood. The markets may also have to deal with a few economic catalysts, including advance second quarter GDP estimate and the FOMC decision. Although the Fed is expected to be circumspect concerning the schedule for normalizing monetary policy, traders are likely to sift through the post-meeting policy statement for any potential clues. Also on the radar would be the political moves on the Ukrainian crisis and the unrest in the Middle East.

At 6:15 am ET, the Dow futures are rising 29 points, the S&P 500 futures are adding 3.50 points and the Nasdaq 100 futures are moving up 10.25 points.

US stocks ended Tuesday's session lower, as geopolitical tensions and mixed economic data stifled the positive sentiment generated by some better than expected corporate financial results.

On the economic front, ADP is set to release its private payrolls employment report at 8:15 am ET. Economists expect the private sector in the US to have added 235,000 jobs in July following an addition of 281,000 jobs in June.

The Commerce Department is scheduled to release its advance second quarter GDP report at 8:30 am ET. The consensus estimate calls for a 3.1% sequential expansion in GDP for the quarter. The Energy Information Administration will release its weekly petroleum status report for the week ended July 25th at 10:30 am ET. The Treasury will announce the results of its auction of 7-year notes at 1 pm ET.

Following the conclusion of a 2-day meeting, the FOMC is due to announce its monetary policy decision at 2 pm ET.

In corporate news, Amgen (AMGN) reported better than expected second quarter results and also raised its guidance for 2014. The company also announced plans to eliminate about 2,900 jobs. Twitter (TWTR) also reported strong second quarter results. American Express (AXP) reported better than expected second quarter earnings and in line revenues. Meanwhile, DreamWorks (DWA) reported second quarter results that fell below expectations.

Marriott (MAR) reported second quarter results that came in above estimates and issued in line earnings guidance for 2014.

Global Payments (GPN) reported better than expected fourth quarter earnings but its revenues were weak. The company issued in line earnings guidance for 2015, but its revenue guidance was weak.

Akamai Technologies (AKAM), Allstate (ALL), Barrick Gold (ABX), (CTRP), Digital River (DRIV), Fidelity Financial (FNF), Hartford Financial (HIG), Kraft Foods (KFT), Lincoln National (LNC), MetLife (MET), Manitowoc (MTW), Murphy Oil (MUR), Noble Corp. (NE), Spansion (CODE), Tesoro (TSO), tw Telecom (TWTC), Western Digital (WDC), Whole Foods (WFM) and Williams Companies (WMB) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets closed on a mixed note, with the Chinese, New Zealand and Singapore markets retreating, while most other major markets in the region advanced. The Indonesian market remained closed. Traders chose to remain cautious ahead of some key first-tier economic events from the US even as geopolitical tensions hung around like a scepter.

After seeing some volatility in the morning, Japan'sNikkei 225 average ended up 28.16 points or 0.18% at a fresh 6-month high closing high of 15,646. The market benefited from the yen's weakness against the dollar, which has seen some strength on rate hike expectations. Solid domestic earnings reports also lent support. Australia's All Ordinaries added 34.50 points or 0.62% before closing at 5,615.

Hong Kong'sHang Seng Index ended up 89.1 points or 0.36% at 24,730, while China's Shanghai Composite weakened on profit taking following strong gains in recent sessions, with the index settling 1.95 points or 0.09% lower at 2,181.

On the economic front, a report released by Japan'sMinistry of Economy, Trade and Industry showed that industrial output in Japan fell 3.3% month-over-month in June, worse than the 1.2% drop forecast by economists.

With the EU announcing stricter sanctions against Russia impacting broader economic segments, and domestic earnings coming in mixed, the mood in Europe has turned sour. The major European averages are currently trading lower.

In corporate news, cement maker reported first half earnings that trailed expectations, hit mostly by negative currency impact. Airbus' first half profits rose year-over-year, helped by strong commercial aircraft deliveries. Infineon reported a strong increase in its third quarter results and raised its outlook for the full year. German chemical company Bayer reported a small increase in its second quarter earnings.

Hurt by a stronger euro, Schneider Electric reported lower profits for its first half. French oil company Total's second quarter fell profit fell due to weak output. British American Tobacco's first half results were also impacted by a stronger local currency. Barclays' (BCS) June quarter results were held down by softness in income from its investment banking business.

On the economic front, data from the European Commission showed that the economic confidence index in the euro area rose unexpectedly to 102.2 in July from revised 102.1 in June, driven by an improvement in industrial sentient. Economists had forecast the score to fall to 101.9 from June's originally estimated value of 102.

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Source: Alliance News

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