While you were sleeping: Oil checks global equities

Friday 27th February 2015

Wall Street was mixed as a decline in oil prices weighed on energy shares, offsetting optimism about a strong US economy and a supportive central bank.

In afternoon trading on Wall Street, the Dow Jones Industrial Average slipped 0.03 percent, while the Standard & Poor’s 500 Index edged 0.04 percent lower. The Nasdaq Composite Index gained 0.37 percent, helped by Apple.

"The action is very constructive in general. It's one of the strongest months in years for the S&P 500, the Nasdaq just a hair away from all-time highs, and we came up very far, very fast,” Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters. “But we've had a big move, and you have to expect some profit taking to come in,"

Slides in shares of IBM and those of Chevron, last down 1.8 percent and 1.3 percent respectively, offset gains in shares of Johnson & Johnson and those of Cisco, up 1.7 percent and 1.5 percent respectively.

Shares of Chevron fell, as did those of Exxon Mobil, last down 1 percent, with other energy companies, as oil prices moved lower amid concern about rising US inventories.

Apple shares were up 1.4 percent after the company sent out invitations for a March 9 event, assumed to mark the launch of its new watch.

Fed Bank of St. Louis President James Bullard told CNBC that said the Federal Open Market Committee should get rid of its pledge to be “patient” in raising interest rates at its next meeting in March so it “can move at any of the meetings during the summer.”

“But we don’t have to. We can make it be data dependent, which is what I’d like,” Bullard said. "If expected inflation goes back to more normal levels then I'd have confidence that actual inflation would follow behind. Through the spring here we'll have to see evidence of that."

A Labor Department report showed the consumer price index fell 0.1 percent in the 12 months through January, the first drop since October 2009, following a 0.8 percent increase in December. It declined 0.7 percent from December, after a 0.3 percent slide in the prior month.

Separately, jobless claims increased by 31,000 to 313,000 in the week ended February 21 from a revised 282,000 in the prior period, as more people began looking for work.

A Commerce Department report showed orders for durable goods climbed 2.8 percent in January, after a revised 3.7 percent decline in December.

“We have a Goldilocks situation of global liquidity expansion and a strong US economy,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management in Tokyo, told Bloomberg.

In Europe, the Stoxx 600 Index ended the session with a 1 percent gain from the previous close, lifting its advance for 2015 so far to 14 percent. The FTSE 100 Index edged up 0.2 percent to set a fresh record closing high, lifted by Standard Chartered.

Germany’s DAX, set a record high, finishing up 1 percent following a report showing the country’s unemployment rate dropped more than expected in February.

BusinessDesk.co.nz

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