Overseas Market Report – U.S. Stocks Fall amid Flurry of Earnings, Data
U.S. stocks closed lower on Tuesday amid a flurry of earnings and weak data.
U.S. durable goods orders fell 1.2% in September from August levels. August's decline was revised down to a 3% drop from an originally reported 2.3% fall. Orders have been under pressure from a strong dollar and low oil prices.U.S. home prices were up 4.7% year over year in August, according to the Case-Shiller report, accelerating from the 4.6% rise seen in July.
Consumer confidence was down in October. The Conference Board said its index fell to 97.6 in the month from 102.6 in September. Economists were looking for a reading of 102.8.
At the close, the S&P 500 was down 0.3%, the Dow was 0.2% lower and the NASDAQ shed 0.1%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 95 cents (2.69%) to $34.37, ResMed gained $1.17 (2.08%) to $57.41, Telstra Corporation lost 15 cents (0.75%) to $19.77, Spark New Zealand added 7 cents (0.68%) to $11.17 and Westpac declined 32 cents (1.38%) to $22.80.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.03% and the 5-year yield was 1.36%.
Comcast's (CMCSA) (CMCSK) third-quarter results exhibited many of the same themes seen recently: strong cable results, solid box-office receipts, and rapid theme park growth, offset in part by weakness in the core cable television segment. Comcast's cable business continues to post impressive results, steadily increasing its customer base at the expense of its phone rivals. The firm added 156,000 net customer relationships during the quarter, up from 82,000 added a year ago.
Merck's (MRK) third-quarter largely matched Morningstar's top-line expectations and slightly exceeded its bottom-line projections. On the top line, mixed product trends led to an overall 4% year-over-year growth rate, which Morningstar expects will continue through 2016. The company's top drug Januvia (16% of sales) posted a better-than-expected 17% growth rate. Offsetting the strong Januvia sales, both immunology drug Remicade and HIV drug Isentress posted minor declines.
Shares of UPS (UPS) were down after the firm reported an unexpected decline in revenue. The shipping giant said lower fuel surcharges and the impact of the strong dollar sent revenue down slightly to $14.24 billion from $14.29 billion. Overall earnings were above expectations and management backs its full-year outlook.
Pfizer (PFE) reported better-than-expected results. Excluding one-time items, the firm earned 60 cents per share, up from 57 cents a share in the year-ago quarter and expectations that they would earn 51 cents a share. The firm also raised its full-year earnings outlook.
Ford (F) reported third-quarter net income that was nearly double what it earned in the year-ago quarter. Still, earnings were slightly below expectations and the firm warned that fourth-quarter profits will be hit by higher labour and other costs.
Shares of BP (BP) were down slightly after the oil major reported third-quarter results. The firm said its replacement cost profit came in at $1.23 billion versus $2.39 billion in the year-ago quarter as low oil prices weighed. Management also laid out a plan to reduce costs and capital spending to cope with a prolonged low oil price environment.
European markets were lower.
The FTSE 100 was off 0.8% while the French CAC 40 and Germany's DAX were each down around 1.0%.
Asian shares were mixed.
The Shanghai Composite and Hang Seng were both up around 0.1%, while the Nikkei 225 was down 0.9%. India's Sensex fell 0.4%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 21 points lower at 5,325.
Tuesday 27 October – close. The Australian market finished flat after a roller-coaster trading session. Weakened commodity prices put pressure on the local miners and energy providers, offsetting growths from the big banks and healthcare companies. There were mixed results from the sectors; healthcare gained most significantly while energy and materials were the biggest laggard. The Australian dollar depreciated against the major currencies.
The All Ordinaries fell 1.70 points to 5,384.60 while the S&P/ASX 200 dropped 1.80 points to 5,346.20.
IOOF Holdings (IFL)
IOOF Holdings announced that it has achieved positive net flows of $1.24bn in funds under management, administration and advice for the first quarter of the FY2016. As at 30 September 2015, funds under management, administration, advice and supervision (FUMAS) totalled $148.8bn. These impressive results were achieved against a back drop of difficult market conditions. Net positive flows of $509m into its advice businesses included strong flows from Shadforth, Lonsdale and Ord Minnett. Net positive flows of $283m into the Company's Flagship Platforms and positive flows of $115m to platforms overall, represents a continuation 3 years of positive organic growth. Investment Management inflows of $617m included a continuation of the prior quarter momentum for its Multi-Manager business. IFL added 11 cents to $9.29.
SkyCity Entertainment Group (SKC)
SkyCity Entertainment Group announced that the Company and leading New Zealand construction contractor Fletcher Construction have announced a partnership to build the New Zealand International Convention Centre (NZICC) and a new 5-star hotel. It has agreed the terms of a binding, $477m contract with Fletcher Construction Company to build and complete the design of the NZICC, the 5-star, 300-room Hobson Street hotel, the retail laneway linking Nelson and Hobson streets, and 1327 carparks under the NZICC. The construction projects will create at least 1000 jobs during their 38-month build, plus 1140 positions across conventions, hospitality, retail, gaming and food and beverage once both the NZICC and the new hotel are operational. SKC remained unchanged at $3.70.
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