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Market Update

Greek Tail Wags U.S. and European Markets, Oil Rally Fizzles


Author: Nichole Harper
ticker.com
Last Update: 12:36 PM ET February 11 2015

12:35 PM New York Stocks on Wall Street traded in a tight range and crude oil declined 1%. European finance ministers and lenders meet Greece and appear in no mood to strike a compromise for the release of the next tranche of bailout. Germany, France and Russia diverge on Ukraine solution.

Stocks in New York had a downward bias but fluctuated in a tight range as finance ministers in the euro zone meet and crude oil declined 1%.

Market indexes have been trying to break out on the higher after corporate earnings have met lowered expectations despite the recent rise in the dollar.

U.S. indexes have managed to jump 1% intra-day in four of the last seven sessions only to lose gains by the end of the day.

Crude oil declined 75 cents or 1.2% in New York to $49.35 a barrel as commodities traders forecast oil to turn lower and test $40 mark after the recent surge of 22% in the last two weeks.

Investors have stayed on the sidelines and indexes in the euro zone face headwinds after Greece and Germany appear to be in no mood to compromise. Finance leaders of the euro zone and international lenders are meeting today but Greece is facing an uphill task in selling its bridge loan plan.

Time is running out for Greece to strike a compromise as the struggling nation is expected to run of money by the end of this month and the country needs additional 10 billion euros in loans.

On Wall Street trading, Tollbooth Strategy Index rose 0.2% or 22.85 to 10,319.24.

S&P 500 index fell 1.97 or 0.01% to 2,066.49 and the Nasdaq Composite Index rose 16.28 or 0.3% to 4,803.92.

U.S. Movers

PepsiCo, Inc (PEP) jumped 2.1% or $2.06 to $100.05 after the food and beverage company reported net revenues in the fourth-quarter ending on December 27 fell 1% to $19.95 billion from a year ago period.

Net income in the quarter plunged 25% to $1.31 billion or 87 cents per diluted share compared to $1.74 billion or $1.12 from the same quarter last year.

PepsiCo forecasted earnings per share growth of 7% in fiscal 2015 and revenues to increase in mid-single digits compared to 2014.

The company also raised its yearly dividend by 7.3% to $2.81 per share and plans to return up to $9 billion to shareholders through payouts and buybacks in current year.

Rite Aid Corporation (RAD) surged 10.4% or 79 cents to $8.37 after the drugstore chain agreed to acquire pharmacy-benefit manager Envision Pharmaceutical Services for about $2 billion in a cash-and-stock from investment firm TPG.

The transaction is expected to close in September.

Time Warner Inc (TWX) added 5 cents to $80.76 after the media and entertainment group said net revenues in the fourth-quarter ending in December slid 0.9% to $7.53 billion from a year ago period.

Net income in the quarter plummeted 27% to $718 million or 84 cents per diluted share compared to $983 million or $1.06 from the same quarter last year.

The company said revenues form Warner Bros declined 5% to $3.8 billion while Turner revenue increased 2% to $2.6 billion. Revenues from HBO climbed 6% to $1.3 billion.

For the year, Time Warner forecasted earnings per share between $4.60 and $4.70 and raised quarterly dividend by 10% to 35 cents.

Thomson Reuters Corporation (TRI) declined 2.9% or $1.15 to $38.44 after the financial information service provider reported net revenues in the fourth-quarter ending in December fell 2.1% to $3.21 billion from a year ago period.

Net in the quarter swung to profit $1.16 billion or $1.43 a diluted share compared to a loss of $343 million or 43 cents from the same quarter last year.

The company forecasted organic revenues for the fiscal 2015 to increase and adjusted EBITDA margin between 27.5% and 28.5% and underlying profit margin in the range of 18.5% to 19.5% and free cash flow between $1.6 million and $1.8 billion.

European Markets

European market indexes declined ahead of meeting of finance ministers of the euro zone and the prospect of an agreement for the 10 billion euro bridge loan to Greece appeared dim.

Market indexes traded volatile across the euro zone and the ASE Index fell as much as 5% and equity indexes in Portugal and Spain declined 0.9%.

Greek 3-year bond yield rose 110 basis points to in Athens to 20.65%.

Investors anticipate a compromise between Germany and Greece paving the way for the release of bridge loan and averting debt repayment crisis for Greece and also give time to the newly elected government to organize its budget.

In London trading, FTSE 100 index slipped 0.5% or 31.81 to 6,797.31 and in Frankfurt the DAX index rose 0.1% or 11.24 to 10,765.07.

In Paris, CAC 40 index fell 0.2% or 9.98 to 4,685.67.

Glencore Plc fell 0.3% to 270.35 pence after the pence after the Switzerland-based diversified natural resource explorer plans to divest 23.9% stake in South African platinum miner Lonmin Plc worth about $367 million during the first-half of this year in response to ""the volatile market backdrop.""

The company lowered capital spending of 2015 between $6.5 billion and $6.8 billion less than the earlier estimate of $7.9 billion.

Heineken N.V jumped 2.5% to 66.24 after the Netherlands-based beer maker reported revenues in the year ending in December edged up 0.1% to 21.19 billion from 21.17 billion a year ago period.

Net profit in the year soared 11% from a year ago to 1.52 billion compared to 1.36 billion and diluted earnings per share increased to 3.05 from 2.75.

Reckitt Benckiser Group Plc advanced 3.2^ to 5,765 pence after the household, health and personal care maker reported net revenues in the year ending in December declined 4.6% to 8.84 billion from 9.27 billion a year ago period.

Net income in the year soared 85.1% from a year ago to 3.22 billion from 1.74 billion and diluted earnings per share jumped to 213.5 pence from 46.2 pence.

Asian Markets

Financial markets in Japan were closed today.

In Mumbai, Sensex and Nifty indexes rebounded on hopes that the recent election defeat of BJP in Delhi Assembly election may spur faster and visible economic reforms by the Narendra Modi led central government.

Indian rupee rose 20 paisa to 61.25 against one dollar.

The Sensex Index jumped 178.97 or 0.6% to close at 28,533.97. The CNX Nifty rose 61.85 or 0.7% to 8,627.40.

Jaiprakash Associates Limited decreased 1.5% to ₹23.55 after the diversified infrastructure conglomerate reported net loss in the third-quarter widened to ₹116.09 crore compared to ₹88.71 in the year ago period.

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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