While you were sleeping: Stocks ease from records

Thursday 22nd December 2016

Wall Street slipped as investors reassessed valuations in a market trading near record highs.

In 12.56pm trading in New York, the Dow Jones Industrial Average slipped 0.06 percent, while the Nasdaq Composite Index moved 0.15 percent lower. In 12.41pm trading, the Standard & Poor’s 500 Index eased 0.08 percent.

In the Dow, declines in shares of Merck and those of Pfizer, down 1.9 percent and 1.3 percent respectively, outweighed gains in shares of Boeing and those of American Express, recently trading each 0.6 percent higher.

“We've had this huge eight-year bull market and now is an opportunity to think if this move and valuations are justified," Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina, told Reuters.

Shares of FedEx fell, shedding 2.5 percent as of 1.03pm in New York, after the company posted quarterly earnings that fell short of expectations.

“FedEx will likely continue to suffer near-term margin pressure due to increased investment in their ground and freight divisions,” Cowen & Co analyst Helane Becker wrote in a note to investors, Bloomberg reported.

“Long-term, we continue to believe FedEx’s investments will lead to margin growth and increased throughput,” noted Becker, who reiterated her outperform rating on the stock.

Shares of Twitter dropped, trading 4.4 percent weaker as of 1.05pm in New York, after its chief technology officer, Adam Messinger, said he is leaving the company.

“We’re taking steps to streamline and flatten the organisation by elevating our engineering, product and design functions, with each area now reporting directly to [CEO] Jack” Dorsey, Twitter said in a statement, according to Bloomberg. “We believe these updates to our organisational structure will enable increased discipline in our product strategy and faster execution."

Meanwhile, The Coca-Cola Company said it agreed to buy Anheuser-Busch InBev's stake in their Coca-Cola Beverages Africa bottling joint venture for US$3.15 billion.

Coca-Cola also agreed to acquire AB InBev’s interest in bottling operations in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras for an undisclosed amount, it said in a statement.

The transactions, subject to approvals, are expected to close by the end of 2017, the company said.

Coca-Cola shares traded steady at US$41.66 as of 11:48am in New York.

The latest US housing data were better than expected. A National Association of Realtors report showed existing home sales rose 0.7 percent to an annual rate of 5.61 million units in November, the highest sales pace since February 2007 and up from a downwardly revised pace of 5.57 million units in October.

“The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months," Lawrence Yun, NAR chief economist, said in a statement. "Furthermore, it's no coincidence that home shoppers in the Northeast—where price growth has been tame all year—had the most success last month.”

In Europe, the Stoxx 600 Index ended the session with a 0.2 percent decline from the previous close. The UK’s FTSE 100 Index inched 0.04 percent lower, while France’s CAC 40 Index fell 0.3 percent. Germany’s DAX Index eked out a 0.03 percent gain.

In Spain, bank stocks dropped after a ruling by the European Court of Justice that officials at Bank of Spain estimate might force them to pay back more than 4 billion euros to clients.

Banco Popular Espanol closed 5.8 percent lower.

BusinessDesk.co.nz

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