S&P posts slight gains, IBM drags
NEW YORK: The benchmark S&P 500 index posted slight gains yesterday, helped by gains from industrial and energy stocks, but IBM’s disappointing results and a sell-off in semiconductor stocks weighed on the Nasdaq and the Dow. IBM fell 6.2 percent after the company reported quarterly profit margins that fell short of Wall Street expectations.
Semiconductor stocks also took a hit, led by Lam Research’s 5 percent drop after what analysts called a disappointing shipment forecast. The S&P technology index fell about 0.5 percent. Not all results were disappointing. Morgan Stanley rose 3 percent after it reported a 40 percent jump in quarterly profit, driven by its trading business. United Airlines rose 1.6 percent after reporting a rise in profit and CSX Corp jumped 7 percent after the railroad operator topped profit estimates. That helped lift the Dow Jones Transport index by 1.2 percent.
Oil prices jumped about 2 percent, lifted by a reported decline in US crude inventories and the risk of supply disruptions. Exxon and Chevron were up about 1.3 percent. S&P 500 companies are expected to post an 18.6 percent rise in profits in the first quarter, the biggest increase in seven years, according to Thomson Reuters data. Stocks have gained solidly in the past two days after strong results from industry bellwethers as well as positive economic data helped investors turn attention away from geopolitical and trade tensions.
Europe stocks rise Europe’s major stock markets rose yesterday after solid gains elsewhere, with London buoyed by the weak pound as UK inflation dived to a one-year low. Asian markets climbed following a rally on Wall Street as easing trade and Syria concerns allowed investors to concentrate on earnings and upbeat data, while fresh news on US-North Korea talks also provided support. “Stocks in Europe are higher... as the global mood starts to improve,” said CMC Markets analyst David Madden. “There was a strong finish in New York last night and Asia overnight as traders focus more on corporate and economic data. “While the Syrian conflict and uncertainty surrounding global trade are on hold, investors could remain bullish.” London’s benchmark FTSE 100 index of major companies was the standout performer in Europe, as official data showed that annual British inflation slowed unexpectedly to 2.5 percent in March from 2.7 percent in February. The news, which confounded expectations for no change, sent the pound reeling as it undermined the urgency of raising interest rates-although analysts said a hike was still expected in May. Pundits said the data nevertheless throws into doubt the course of the Bank of England’s monetary policy this year. “The FTSE 100 has gone from the back of the pack to the market leader, as a sharp deterioration in UK inflation has driven the pound sharply lower, ramping up FTSE gains,” said IG analyst Joshua Mahony. “The out-performance of the pound has certainly been one of the main determinants of FTSE 100 underperformance among European bourses.” The weaker pound pushes up share prices of multinationals trading on the FTSE.
Hammerson axes takeover
In company news, British retail property giant Hammerson yesterday scrapped a £3.4-billion ($4.9-billion, 3.9-billion-euro) takeover of rival Intu that would have created a pan-European shopping mall giant, citing a weak UK consumer market. Investors appeared to welcome Hammerson’s decision, with the group’s share price jumping more than three percent. Intu meanwhile slumped nearly four percent. Hammerson’s U-turn comes amid difficulties for retailers housing large floor space who are competing also for fast-growing online sales.