European Stocks Rise on Euro-Zone Industrial Output Rebound
European Stocks Rise on Euro-Zone Industrial Output Rebound
Midday Report: SABMiller Fends Off Takeover; Stocks Rise
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European markets rose Thursday, after a report on industrial production in the 18-country euro zone boosted confidence in the economic recovery and as investors awaited the latest on U.S. retail sales and jobless claims. In London, AstraZeneca rose after announcing a global license agreement with Synairgen plc on a novel inhaled medication for treating respiratory tract infections in patients with severe asthma. Mining company Anglo American plc fell after Morgan Stanley recommended selling the stock, while online supermarket Ocado plc got a boost from a buy recommendation from JPMorgan Chase & Co. In Tokyo,Takata Corp. fell amid growing concerns over safety problems with its airbags, currently being investigated by regulators in the U.S.
Stocks were slightly higher in midday trading Friday, though struggled to hold onto significant gains. One company weighing on the S&P 500 was Gap (GPS) which fell after reporting a 1% decline in same-store sales in September, driven by a 10% slump in sales at its Banana Republic chain. The company said a stronger U.S. dollar had made for a 'challenging' month. SABMiller (SBMRY) is playing defense after Anheuser-Busch (BUD) criticized its rejection of a takeover. The U.K. beer company has increased its annual cost savings target by another $550 million to appease shareholders pushing to reconsider Anheuser's offer. United Continental (UAL) spiked after upping its profit margin projections for its recently-ended third quarter.
U.S. stocks opened flat as the Dow Jones Industrial Average tries to make it 6 up days in a row. Soon, Starbucks (SBUX), KFC (YUM), and Chili's will accept Apple Pay (AAPL). It's rolling out the electronic payment service to many of those stores by the end of this year. Wider acceptance should give Apple Pay a much needed boost. Lack of stores that accept it has been one reason it has been slow to take hold. U.S. import prices barely moved in September. There was a slight decline. Oil prices rebounded and the weak global economy appeared to moderate. Federal Reserve Chief Janet Yellen has argued that import prices have been a major factor keeping inflation well below the Fed's 2% target rate. Brewer SABMiller has announced a drastically accelerated cost-cutting plan following a $100 billion takeover approach by rival Anheueser Busch Inbev.
The stock market is on a winning streak. The Dow Jones Industrial Average is up 5 straight days, its best winning streak since February. The S&P 500's string of gains is the best since December. The Dow also closed above 17,000 for the first time since August. Earnings season has officially begun and it's not off to a great start. Alcoa (AA) had a big earnings miss. Its high growth aerospace and automotive materials segments could not soften the effects of low commodity prices. Alcoa also slashed its outlook for China's production of cars and trucks. Tesla (TSLA) CEO Elon Musk did some trash talking against Apple when interviewed by a German business newspaper. He told the paper that Apple has only hired the engineers its fired. He says cars are complex machines when compared to smartphones and watches. The annual meetings of the World Bank and International Monetary Fund begin today. Atlanta Federal Reserve President Dennis Lockhart speaks before the Society of American Business Editors and Writers. August Wholesale Inventories are released.
For Friday October 9, there are several key reports coming out showing us how the economy is doing so far. We start off the day with import and export prices coming out at 8:30 am Eastern, and then New York Federal Reserve Bank President Dennis Lockhart is set to speak in New York at 9:15 a.m. Last, at 10 a.m., we expect wholesale trade numbers to come out. Economists are expecting 0.1% increase for the month of August. The report shows three things to investors: monthly sales, inventories and the inventory to sales ratio. TheStreet's Portfolio Analyst Scott Berman said the wholesale trade report for the month of July was ‘a bit disappointing,’ since the numbers were positive for June. He expects August numbers to be positive and added that it’s a ‘key input into the GDP calculation for the third and fourth quarter.’ TheStreet's U-Jin Lee reports in New York.
Stocks broke free of range-bound trading in the final hour to rally into the close as a March rate hike grew more likely. Netflix (NFLX) boosted the S&P 500 and Nasdaq after raising the price of its streaming service by a $1 a month. The increase will apply only to new customers who sign up for a plan. Similar price increases were rolled out in Europe in August. Increased downside risks in September encouraged members to delay a rate hike last month, according to the Federal Reserve's September meeting minutes. Members said it would be 'prudent' to wait until risks eased before tightening monetary policy for the first time in a decade. That increased the likelihood of a 2016 hike.
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