US stocks mixed; banks, energy sectors gain
Denmark’s Lego sales up 36 pct, revenue rises 46% in H1
NEW YORK, Sept 27, (AP): Stocks were mixed on Wall Street Monday as technology stocks fell and offset gains for banks and energy companies.
The S&P 500 index fell 0.1% as of 11:15 a.m. Eastern. The Dow Jones Industrial Average rose 156 points, or 0.5%, to 34,956 and the tech-heavy Nasdaq fell 0.5%.
The benchmark S&P 500 had more gainers than losers. Banks made solid gains as bond yields continued climbing, which allows them to charge higher interest rates on loans. The yield on the 10-year Treasury rose to 1.48% from 1.46% late Friday. Bank of America gained 2.4%.
Oil prices rose 1.7% and supported gains for energy stocks. Exxon Mobil rose 2.6%.
The technology sector, which carries an outsized weight within the S&P 500, slumped 0.9% overall. Apple fell 1.1% and Microsoft fell 1.3%.
A measure of small-company stocks did better than the major indexes in a sign that investors were still confident about future economic growth. The Russell 2000 index rose 1.7%.
Markets have had a choppy month so far and the S&P 500 is on pace to shed 1.6% in September, which would mark the first monthly loss since January. Investors have been trying to gauge just how much room the economy has to grow amid waves of COVID-19 crimping consumer spending and job growth while inflation remains a concern.
Strong
The economic recovery started strong in 2021, but analysts and economists have been tempering their forecasts for the rest of the year. In a survey being released Monday, the National Association for Business Economics found that its panel now expects fullyear economic growth of 5.6%, down from a forecast for 6.7% growth in NABE’s previous survey in May. However, economists raised their forecast for 2022 economic growth to 3.5% from a previous outlook of 2.8%.
Consumer spending has been the key driver for the economic recovery and it has been crimped in part by rising cases of COVID-19 because of the highly contagious delta variant. Investors will get a glimpse into how that could continue to play out on Tuesday when The Conference Board releases its consumer confidence index for September.
Investors have been facing an otherwise quiet period for corporate news as companies prepare to start reporting their latest quarterly financial results in the next few weeks.
Markets in Europe edged higher while Asian markets were mixed.
France’s CAC 40 added 0.6% to 6,678.66 in early trading, while Germany’s DAX gained nearly 0.9% to 15,667.40. Britain’s FTSE 100 edged up 0.3% to 7,072.39. U.S. shares were set for gains, with the future for the Dow industrials up 0.5% at 34,840.00. The S&P 500 future rose 0.4% to 4,462.25.
Japan’s benchmark Nikkei 225 was little changed, inching down less than 0.1% to finish at 30,240.06 after zigzagging earlier in the day. Australia’s S&P/ ASX 200 gained 0.6% to 7,384.20. South Korea’s Kospi added 0.3% to 3,133.64. Hong Kong’s Hang Seng inched up 0.1% to 24,208.78, while the Shanghai Composite shed 0.8% to 3,582.83.
Japan’s ruling party holds an election later this week to choose a leader, who is likely to succeed Yoshihide Suga as prime minister after just one year in office. All the candidates are certain to stick to the nation’s pro-U.S. policies, despite some nuances in their views.
Growth
They also are all promising to boost government spending to try to catalyze growth in the world’s third largest economy.
Analysts also say Japan’s central bank “tankan” economic survey for the third quarter, due out Friday, likely will show a deterioration in business conditions because of various disruptions to supply chains and renewed outbreaks of COVID-19 in many regions.
Although some parts of the world have lifted COVID-19 restrictions and are gradually returning to “normal” life, worries remain in Asia about further waves of infections because vaccine rollouts have been slower than the West in some nations.
In Singapore, further COVID-19 restrictions kicked off in an attempt to curb the virus’ spread, as daily new cases have topped the city-state’s peak reached in April 2020.
“”Overall, the manufacturing sector may remain resilient as seen from previous phases of restrictions, but the services sector may come under pressure. That said, previous business adjustments and softer tightening compared to past restriction phases may aid to reduce some impact,” said Yeap Jun Rong, market strategist at IG in Singapore.
U.S. markets have had a rough September and investors could be in for more volatility given various concerns, including COVID-19 and its lingering impact on the economy, along with a slow recovery for the employment market.
Worries over troubled Chinese real estate developer Evergrande are still weighing on global markets. Some Chinese banks on Friday disclosed what they are owed by Evergrande, seeking to dispel fears of financial turmoil as it struggles under $310 billion in debt.
In energy trading, U.S. benchmark crude added 91 cents to $74.89 a barrel in electronic trading on the New York Mercantile Exchange. It rose 68 cents to $73.98 per barrel on Friday. Brent crude, the international standard, gained 94 cents to $79.03 a barrel.
In currency trading, the U.S. dollar inched down to 110.68 Japanese yen from 110.72 yen. The euro cost $1.1710, down from $1.1714.
COPENHAGEN, Denmark, Sept 27, (AP): Danish toy company Lego said Tuesday that it saw consumer sales soar 36%, revenue grow 46% to 23 billion kroner ($3.62 billion) and net profit going up 140% to 6.3 billion kroner ($992 million) during the first half of 2021.
“I am super happy with this result,” CEO Niels B. Christiansen told The Associated Press. “We have seen a giant leap,” and called it “a unique and strong result.”
In its earning report, the privately held group saw its operating profit more than double - up 104% to 8 billion kroner ($1.26 billion) compared to the same period a year ago - despite significant investments in major long-term initiatives. The operating profit for the six months that ended June 30, also was offset by increased freight and raw material costs. The growth, Christiansen said, also benefited from fewer COVID-19-related restrictions compared with 2020 as Lego factories operated uninterrupted and most retail stores reopened. He noted that, during the pandemic, “our competitors had the same challenges as us. Our good result comes as a consequence of a long-term strategy.”
All market groups delivered double-digit consumer sales growth.
Headquartered in Billund, western Denmark, Lego produces in Mexico for its American markets and in China for its Asian market. The production for Europe comes from factories in the Czech Republic and in Denmark. Looking ahead, Christiansen said “we continue to see strong demand for our products.”
“We expect top-line growth to stabilize to more sustainable levels as people return to pre-pandemic spending patterns,” he said. “This trend, combined with our plans to accelerate re-investments into the future of the business, is expected to result in more normalized profit levels moving forward.”