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Market Update

Cautious Advance on Wall Street with Tech Earnings in Focus


Author: Nichole Harper
ticker.com
Last Update: 6:47 PM ET October 19 2015

[4:10 PM New York City, New York – Stocks advanced cautiously higher on Wall Street as tech companies dominate busy earnings season this week. Energy companies declined after crude oil dropped nearly 3%. Morgan Stanley reported profit declined for the second quarter in a row. Weight Watchers more than doubled.

Stocks on Wall Street cautious advanced ahead of the busy earnings week and tech and energy stocks were in focus.

Energy companies declined after crude oil priced edged down in New York and in London and fell as much as 2.9% before recovering at close.

Tech companies are scheduled to dominate in the busy earnings week and several large tech players including IBM are expected to report.

On Wall Street, Tollbooth Strategy Index increased 36.66 or 0.4% to 10,653.99.

S&P 500 index slid 2.75 to 2,030.38 and the Nasdaq Composite Index rose 9.06 or to 4,895.62.

Crude oil in New York fell $1.06 to $46.20 a barrel and gold slipped $4.70 to $1,172.60 an ounce.

U.S. Movers

Morgan Stanley (MS) dropped 5.6% or $1.91 to $32.04 after the financial services provider reported revenues in the third-quarter ending in September declined 12.8% from a year ago to $7.77 billion.

Net income in the quarter tumbled 42.3% to $943 million or 48 cents per diluted share compared to $1.63 billion or 83 cents from the same quarter last year.

The company said revenues in the fixed income and commodities trading segment plunged 41% to $583 million and revenues in institutional securities business declined 14% to $3.90 billion and global wealth management segment slumped 4% $3.64 billion from a year ago period.

Microsemi Corporation (MSCC) slumped 4.6% or $1.72 to $35.64 after the analog and mixed-signal chip maker offered $11.50 per share to acquire semiconductor and software solution provider PMC-Sierra Inc valued at about $2.4 billion, a premium of about 12% to closing price of Friday.

Under the terms, the shareholders of PMC will receive $8.75 in cash and 0.0736 of a share.

Microsemi forecasted net sales for the fourth-quarter to be about $328 million and non-GAAP diluted earnings per share between 72 cents and 74 cents.

PMC-Sierra Inc surged 14.3% to $11.70.

WEX Inc (WEX) jumped 5.3% or $4.91 to $97.02 after the corporate payment solution provider agreed to acquire Electronic Funds Source LLC, transportation payments services provider for about $1.1 billion in cash and 4 million in stock to be issued to investment funds affiliated with Warburg Pincus.

Weight Watchers International, Inc (WTW) surged 86.9% or $5.89 to $12.67 after the weight management services provider confirmed that the TV show host and producer Oprah Winfrey agreed to acquire 10% stake worth about $43.2 million, including option to buy an additional 5%in the company.

Under the terms, the weight management company offered approx 6.4 million shares at $6.79 per share.

Winfrey also agreed to help company with marketing and offered right to use her name, image, likeness and endorsement for the company.

European Markets

Seasonally adjusted construction activities in August slid 0.2% in euro area and 1.2% in the wider region of EU28 compared to a month ago.

In July, activities in EU area rose 0.4% in both the zones, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index slipped 32.31 or 0.5% to 6,345.65 and in Frankfurt the DAX index gained 61.39 or 0.6% to 10,165.08.

In Paris, CAC 40 index slid 3.07 to 4,699.72.

Christian Dior SA fell 0.2% to €169.25 after the France-based luxury consumer goods producer reported revenues in the year ending in June soared 14% from a year ago to €35.08 billion.

Net profit in the year surged 58% from a year ago to €6.17 billion compared to €3.89 billion.

The company said net revenues in the first-quarter ending in September jumped 16% from a year ago to €9 billion.

ITV Plc slipped 0.3% to 248.20 pence after the U.K.-based free-to-air commercial broadcaster agreed to acquire the TV business of Northern Irish network partner UTV Ltd for £100 million or $154 million in cash from UTV Media Plc.

UTV Media Plc stock soared 5.8% to 183.48 pence.

Wincor Nixdorf AG surged 17.1% to €45.56 after the Germany-based electronic systems maker agreed to be acquired by the U.S.-based automated teller machine maker Diebold Inc for €52.50 per share.

The transaction valued the company at about €1.7 billion or $1.9 billion in cash and stock, 35% premium to the closing price of October 16.

Diebold Inc stock in trading on the NYSE jumped 6.9% to $35.89.

Asian Markets

Nikkei average in Tokyo trimmed losses after China reported slightly better than expected third-quarter economic growth of 6.9%. Tokyo Electric Power rose after a report suggested that the company plans to raise $2.8 billion in bonds in the fiscal 2016.

Stocks and market indexes slipped on Monday after China’s economic growth ahead of expectations.

Nervous investors sold China-related stocks in early trading and indexes trimmed losses after China reported third-quarter economic growth of 6.9%, ahead of a slowdown to 6.8% that many economists had anticipated.

The economic growth data was in focus after Premier Li in recent comments had suggested that China may face difficulty in achieving 7% economic growth.

The Nikkei 225 Stock Average slipped 160.57 or 0.9% to 18,131.23 and the broader Topix index decreased 11.09 to 1,494.75.

The yen strengthened to 119.44 against a dollar.

Japan Post Bank Co, after the banking and postal services provider set the price for its initial public offering at 1,450 yen per share.

Separately, Japan Post Insurance Co set its IPO price at 2,200 yen from book-building range between 1,900 yen and 2,200 yen.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc