World stocks mixed after US data back Fed outlook
World stock markets were mixed yesterday while the dollar regained some strength after a US job report showed strong wage gains, giving more ammunition to US policymakers planning further rate rises.
US stock indexes edged mostly lower in trading yesterday, led by declines in energy companies. Oil and gas companies fell the most as the price of crude oil headed lower. Materials stocks notched the biggest gain. Investors had their eye on the latest company earnings and deal news.
KEEPING SCORE: The Dow Jones industrial average fell 52 points, or 0.3 percent, to 19,910 as of 10:18 a.m. Eastern Time. The Standard & Poor’s 500 index slid 5 points, or 0.3 percent, to 2,271. The Nasdaq composite index rose 2 points, or 0.1 percent, to 5,523.
OIL WOES: Rig operator Transocean slumped 4.4 percent and Southwestern Energy fell 4 percent as the price of oil headed lower. Transocean slipped 55 cents to $54.49, while Southwestern Energy was down 41 cents at $9.84.
DISSAPOINTING RESULTS: Acuity Brands slumped 16 percent after the lighting maker reported quarterly results that fell well short of what analysts were expecting. The stock lost $38.30 to $199.06.
STRONG QUARTER: Electronic payment processing company Global Payments climbed 6.8 percent after it reported better-than-anticipated quarterly results. The stock added $5.08 to $79.53.
SOLD: Surgical Care Affiliates surged 15.9 percent after the surgical care center operator agreed to be acquired by UnitedHealth for $2.3 billion in cash and stocks. The deal comes as UnitedHealth, the nation’s biggest health insurer, looks to expand its Optum health business. Shares in Surgical Care Affiliates added $7.74 to $56.49. UnitedHealth slipped $1.12, or 0.7 percent, to $161.29.
PHARMA DEAL: Merrimack Pharmaceuticals jumped 12.5 percent on news the drugmaker is selling its first approved drug, a pancreatic cancer treatment called Onivyde, to French drugmaker Ipsen in a deal worth at least $575 million. Merrimack gained 45 cents to $4.05.
PET PLAY: VCA vaulted 28.1 percent after the pet health care company agreed to be acquired by food and drinks company Mars Inc. for around $7.7 billion. The deal also includes $1.4 billion in debt. Shares in VCA added $19.92 to $90.68.
In Europe, Germany’s DAX was down 0.5 percent, while France’s CAC 40 was 0.7 percent lower. Britain’s FTSE 100 was up 0.4 percent. Indexes in Asia were mixed. Hong Kong’s benchmark Hang Seng index rose 0.3 percent, while South Korea’s Kospi slipped 0.1 percent. Markets in Japan were closed for a holiday.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.3Y percent from 2.42 percent late Friday.
ASIA’S DAY: Hong Kong’s benchmark Hang Seng index advanced 0.3 percent to close at 22,558.69 while the Shanghai Composite in mainland China rose 0.5 percent to 3,171.24. South Korea’s Kospi slipped 0.1 percent to 2,048.78 while Australia’s S&P/ASX 200 jumped 0.9 percent to 5,807.40. Markets in Japan were closed for a holiday. Benchmarks in Southeast Asia were mixed.
ANALYST VIEW: “US markets have closed off the first week of the year with a steady set of gains across sectors and the same can be seen in most Asian markets,” said Jingyi Pan, market strategist at IG in Singapore. “With improving indicators in the US and across Asia, we could see a second set of gains ... in this data-filled week.”
WEEK AHEAD: Potential market-moving events this week include the release of China inflation and Japanese consumer confidence figures today. On Wednesday, US President-elect Donald Trump has scheduled a long-awaited news conference on his global business empire, though Asian markets won’t be able to react until the following day. Chinese trade data and US retail sales numbers are due at the end of the week.
CHINA OUTFLOWS: Official data showed that China’s foreign exchange reserves contracted in December for the sixth straight month, falling by $41 billion to just over $3 trillion according to the People’s Bank of China. The central bank said Saturday its effort to stabilize the yuan was a major reason for the drop in forex reserves. The latest figures underline Beijing’s willingness to use its huge stockpile of foreign currency to stabilize the yuan, which has been declining as residents and companies send more money overseas amid flagging confidence in China’s economy. —AP