News Column

Wall Street Apprehensive Despite Alcoa's Beat

July 9, 2014

WASHINGTON (Alliance News) - Wall Street stocks may open Wednesday's session on a nervous note, as indicated by the trading in the US index futures, which point to a narrowly mixed opening. If early indications are anything to by, Alcoa's forecast-beating results may have done very little to lift the market's mood. Among the rest of the global markets, Asian stocks closed lower, while the European markets are also showing a lackadaisical sentiment, as traders digest inflation data from China, which slowed, although by a little more than expected. The domestic markets may also take cues from the FOMC minutes scheduled to be released in the afternoon.

At 6:15 am ET, the Dow futures are slipping 12 points and the S&P 500 futures are moving down 0.50 points, while the Nasdaq 100 futures are rising 2 points.

US stocks retreated for the second straight day on Tuesday, as the markets paused for want of direction amid little catalysts.

On the economic front, the Energy Information Administration is scheduled to release its petroleum status report for the week ended June 4th at 10:30 am ET.

The Treasury is set to release the results of its auction of 10-year notes at 1 pm ET.

The Federal Open Market Committee is due to release the minutes of its June meeting at 2 pm ET.

In corporate news, Alcoa (AA) reported second quarter adjusted net income of 18 cents per share on revenues of USD5.8 billion, almost flat with the year-ago period. The results exceeded estimates. The company reaffirmed its 2014 global aluminum demand growth forecast of 7%.

Bob Evans (BOBE) reported fourth quarter non-GAAP earnings from continuing operations of 48 cents per share compared to 69 cents per share last year. Sales fell to USD326.37 million on the back of same store sales decline of 4.1%. The earnings exceeded estimates, while the revenues were below estimates. The company issued weak guidance for 2015.

Healthcare Services Group (HCSG) reported second quarter earnings of 20 cents per share compared to 19 cents per share last year, while revenues rose 17% to USD319.30 million. The results trailed estimates.

International Paper (IP) announced that its board approved a USD1.5 billion stock repurchase program to supplement a USD1.5 billion buyback program announced in September 2013.

Zebra Technologies (ZBRA) said the required waiting period under the US Hart-Scott-Rodino Antitrust Improvement Act of 1976 has expired with respect to its impending acquisition of the enterprise business, excluding iDEN of Motorola Solutions (MSI). The company expects the deal to close by the end of 2014.

The major Asian markets closed lower, with the exception of the Indonesian market, as the negative close on Wall Street overnight and data showing a slowdown in Chinese inflation pressured stocks.

Japan'sNikkei 225 average ended down 11.76 points or 0.08% at a 1-week low of 15,303, declining for the third straight session. Export stocks moved mostly to the downside. Australia's All Ordinaries lost 56.30 points or 1.02% before closing at 5,442. The market witnessed broad based weakness, with consumer and IT stocks bearing the brunt of selling. Hong Kong'sHang Seng Index ended at 23,157, down 384.66 points or 1.63%, and China's Shanghai Composite closed 25.41 points or 1.23% lower at 2,039.

On the economic front, a report released by the Chinese the National Bureau of Statistics reported that annual consumer prices inflation in China slowed to 2.3% in June from an 4-month high of 2.5% in May, as food prices increased at a slower rate. Economists expected a more modest slowdown to 2.4%. Meanwhile, producer prices in China fell 1.1% year-over-year in June, slower than the 1.4% drop in May. However, this was a faster rate of decline than the 1% drop expected by economists.

The results of a survey by Westpac and the Melbourne Institute showed that their consumer confidence index for Australia based on the survey rose to 94.9 in July from 93.2 in June.

The European markets are trading mostly lower, erasing early gains.

In corporate news, L'Oreal S.A. said that it has finalized the repurchase of 8% of its common stock that was owned by Swiss food giant Nestle SA. Catering and vouchers company Sodexo S.A. said its revenues for the nine months totaled 13.822 billion euros, compared to 14.214 billion euros last year.

On the economic front, shop prices in the UK fell 1.8% year-over-year in June, according to a report released by the British Retail Consortium. This follows the 1.4% contraction in May and marks the sharpest rate of decline in eight years. Meanwhile, Lloyds Banking Group'sHalifax division reported that UK house prices fell 0.6% month-over-month in May following a 4% increase in April, steeper than the 0.3% drop expected by economists.

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Source: Alliance News

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