Economy

US Stocks Open Lower as Traders React to Earnings News

Published

7 years ago

17/05/2018

By Investors Hub

The major U.S. index futures are pointing to a lower opening on Thursday, with stocks likely to move back to the downside following the strength seen in the previous session.

The downward momentum for the markets comes as traders react to the latest batch of earnings news from several big-name companies.

Shares of J.C. Penney (JCP) are moving sharply lower in pre-market trading after the department store chain reported a narrower than expected first quarter adjusted loss but cut its full-year earnings guidance.

Network equipment maker Cisco Systems (CSCO) may also come under pressure after reporting better than expected fiscal third quarter earnings but providing a disappointing forecast.

On the other hand, shares of Wal-Mart (WMT) are likely to move to the upside after the retail giant reported first quarter results that exceeded analyst estimates on both the top and bottom lines.

Stocks fluctuated over the course of the trading session on Wednesday but largely maintained a positive bias before closing mostly higher. The upward move on the day came on the heels of the sharp pullback seen in the previous session.

The major averages closed in positive territory but well off their highs of the session. The Dow rose 62.52 points or 0.3 percent to 24,768.93, the Nasdaq advanced 46.67 points or 0.6 percent to 7,398.30 and the S&P 500 climbed 11.01 points or 0.4 percent to 2,722.46.

The strength on Wall Street partly reflected a positive reaction to earnings news from Macy’s (M), with the department store operator surging up by 10.8 percent.

Macy’s jumped to its best closing level in over a year after reporting better than expected first quarter results and providing upbeat guidance.

Buying interest was somewhat subdued, however, with geopolitical uncertainty keeping some traders on the sidelines after North Korea threatened to cancel an historic meeting between leader Kim Jong Un and President Donald Trump.

In a statement published by the state-run Korean Central News Agency, North Korean First Vice Minister of Foreign Affairs Kim Kye Gwan suggested that Trump must accept the reclusive communist country as a nuclear power.

“If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-U.S. summit,” Kim said.

Kim pointed to “unbridled remarks” by U.S. officials such as National Security Adviser John Bolton calling on North Korea to abandon nuclear weapons first and be compensated afterward.

The statement from Kim came after North Korea canceled high-level talks with South Korea planned for Wednesday over U.S.-South Korean military drills.

Despite the threats, White House Press Secretary Sarah Sanders said the administrations remains hopeful the meeting will take place.

On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new residential construction in the month of April.

The report said housing starts plunged by 3.7 percent to an annual rate of 1.287 million in April after jumping by 3.6 percent to an upwardly revised 1.336 million in March.

Economists had expected housing starts to drop to an annual rate of 1.310 million from the 1.319 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 1.8 percent to an annual rate of 1.352 million in April after surging up by 4.1 percent to an upwardly revised 1.377 million in March.

Building permits, an indicator of future housing demand, had been expected to edge down to 1.350 million from the 1.354 million originally reported for the previous month.

A separate report from the Federal Reserve showed industrial production increased by slightly more than anticipated in the month of April.

The Fed said industrial production climbed by 0.7 percent in April, matching the upwardly revised increase in March. Economists had expected industrial production to rise by 0.6 percent.

Steel stocks turned in some of the market’s best performances, resulting in a 2.1 percent jump by the NYSE Arca Steel Index. With the gain, the index reached its best closing level in well over two months.

Considerable strength also emerged among computer hardware stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Computer Hardware Index. The advance lifted the index to a record closing high.

Hard drive and memory chip maker Western Digital (WDC) lead the hardware sector higher, surging up by 4.9 percent on the day.

Semiconductor stocks also showed a significant move to the upside, driving the Philadelphia Semiconductor Index up by 1.4 percent.

Micron Technology (MU) posted a standout gain after RBC Capital initiated coverage of the chipmaker’s stock with an Outperform rating.

Tobacco, oil service, and natural gas stocks also saw notable strength on the day, while weakness was visible among utilities stocks.

Economy

NASD OTC Bourse Declines Further by 0.16%

Published

2 hours ago

22/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.

This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.

In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.

The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.

On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.

Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.

FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.

Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.

Economy

Naira Crashes to N1,552/$1 at NAFEM, N1,670/$1 at Black Market

Published

2 hours ago

22/01/2025

Adedapo Adesanya

By Adedapo Adesanya

Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.

In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.

But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.

As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.

Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”

The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.

The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.

Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.

Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

Economy

Brent Falls Below $80 as US Signals Boost to Oil Output

Published

3 hours ago

22/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.

This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.

On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.

As pledged in the campaign, the executive order follows the declaration of a national energy emergency.

The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”

This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.

President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.

The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.

The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.

On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.

In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.

However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.

Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.

Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.