Wednesday 15th October 2014 |
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Wall Street rose after the worst three-day slide since 2011, helped by better-than-expected quarterly results from companies including Citigroup.
Shares of Citigroup climbed, last up 2.8 percent, after the bank reported quarterly profit that surpassed analysts’ expectations. It also detailed plans to exit consumer operations in another 11 countries.
“Our consumer bank and institutional business each had solid performance during the quarter,” CEO Michael Corbat said in a statement. “The revenue improvement was evident across regions and products.”
In late afternoon trading in New York, the Dow Jones Industrial Average advanced 0.45 percent, the Standard & Poor’s 500 Index added 0.84 percent, while the Nasdaq Composite Index rose 0.99 percent.
Gains in shares of Intel and those of Caterpillar, both up 2.5 percent, led the advance in the Dow.
”It’s encouraging that the first few earnings reports we’ve gotten have been solid,” John Canally, an economic strategist at LPL Financial in Boston, told Bloomberg News.
US Treasuries also gained, pushing yields on the 30-year bond two basis points lower to 2.99 percent, while yields on the 10-year note fell to 2.23 percent.
“There is some fear that something else will weaken in terms of economic growth around the world,” Aaron Kohli, an interest-rate strategist BNP Paribas in New York, one of 22 primary dealers that trade with the Fed, told Bloomberg.
Indeed, the latest data from Europe underpinned concern about the region’s economic weakening.
In Germany, the government downgraded its forecast for economic growth this year and next. It now expects the euro-zone’s engine economy to expand 1.2 percent this year and 1.3 percent in 2015, down from April estimates for 1.8 percent and 2.0 percent respectively.
Separately, the ZEW Center for European Economic Research said its index of investor and analyst expectations dropped to minus 3.6 in October, the lowest level since November 2012, and down from 6.9 in September.
Meanwhile shares of Burberry dropped 3.7 percent after the UK maker of luxury goods warned “the more difficult external environment” will crimp profitability this year.
“Looking ahead, while the negative impact of FX on full year reported profit has recently reduced, this benefit will be partly offset by the more difficult external environment,” Burberry said in a statement. “This is expected to result in slight downward pressure on the retail/wholesale margin, as we continue to invest in key initiatives to drive long-term profitable growth.”
Europe’s Stoxx 600 finished the day at 321.53, barely budging from the previous day’s close of 321.56. Both France’s CAC 40 and Germany’s DAX increased 0.2 percent, while the UK’s FTSE 100 Index rose 0.4 percent.
On commodities markets, oil continued to fall, sliding below the US$87 a barrel mark. The extended downturn was fuelled overnight by another lower demand forecast from the International Energy Agency.
BusinessDesk.co.nz
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