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Market Update

HSBC to Cut 50,000 Jobs, Indexes in New York and Europe Struggle

Author: Nichole Harper
Last Update: 1:47 PM ET June 09 2015

1:40 PM – S&P 500 index rebounded in the late afternoon trading and wholesale sales increased 1.6% in April from the revises 3.3% decline in March. HSBC said it plans to cut 50,000 jobs in seven countries, sell businesses in Brazil and Turkey, and increase its focus in China and Asia.

Market indexes on Wall Street returned to positive territory in the late afternoon in active trading and investors digested latest economic reports and HSBC’s plan to refocus in Asia and increase dividend.

In April wholesale sales climbed 1.6% to $448.3 billion from the revised March sales and dropped 3.3% from a year ago month.

Inventories in April rose 0.4% to $576.9 billion from the revised March data and climbed 4.5% from a year ago, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index slid 0.2% or 22.50 to 10,614.40 and the index has turned lower from the high in April.

S&P 500 index rose 0.2% or 3.77 to 2,083.03 and the Nasdaq Composite Index slid 0.1% or 6.89 to 5,014.33.

Crude oil in New York jumped $1.82 to $59.96 a barrel and gold gained $3 to $1,176.60 an ounce.

HSBC said it plans to increase dividend payout, eliminate 50,000 jobs and shrink its investment banking operation by a third. The bank said it plans to cut between 7,000 and 8,000 jobs in the U.K., nearly one in every six jobs in Britain.

The global bank said it will sell businesses in Brazil and Turkey, which will cut down staff by 25,000 and refocus in Asia, especially in China.

The job cut plan will go in hand with the consolidation in IT, closing nearly 12,000 branches and introducing more automation.

U.S. Movers

General Electric Company (GE) rose 3 cents to $27.27 after the diversified company agreed to divest its U.S. sponsor finance business including GE Antares Capital, GE Capital''s lending business and $3 billion bank loan portfolio to Canada Pension Plan Investment Board for about $12 billion.

The transaction is expected to close in the third-quarter.

H&R Block Inc (HRB) jumped 4.6% or $1.43 to $32.68 after the tax preparation and banking services provider reported total revenues in the fourth-quarter ending in April rose 2% to $3.08 billion from a year ago period.

Net income in the quarter fell 0.3% to $473.7 million or $1.71 per diluted share compared to $475.2 million or $1.72 from the same quarter last year.

HD Supply Holdings Inc (HDS) soared 6.1% or $1.97 to $34.42 after the industrial trader and distributor said net sales in the first-quarter ending on May 3 climbed 6.2% to $2.22 billion from a year ago period.

Net in the quarter swung to profit $242 million or $1.21 per diluted share compared to a loss of $12 million or 6 cents from the same quarter last year.

European Markets

The seasonally adjusted UK trade deficit in goods and services narrowed to £1.2 billion in April from £3.1 billion in March. In April, export prices rose 0.3% and import prices dropped 0.4%, the UK National Statistics said.

Second estimate first-quarter gross domestic product rose 0.4% in the euro-area and in the wider region of EU28 nations compared to previous quarter, the Statistical Office of the European Communities reported today.

In London trading, FTSE 100 index fell 0.5% or 36.82 to 6,756.22 and in Frankfurt the DAX index dropped 1.2% or 138.71 to 10,926.76.

In Paris, CAC 40 index slipped 0.7% or 33.13 to 4,824.53.

Nordex SE gained 1.3% to €20.76 after the Germany-based wind power systems maker said it secured 17 orders with a total capacity of more than 150 megawatts in domestic markets.

The company now opened a regional center in Würzburg for better service contracts with terms of up to 15 years.

RPC Group Plc climbed 3.6% to 640.50 pence after the U.K.-based rigid plastic packaging reported total revenues in the year ending in March surged 17% to £1.22 billion from £1.05 billion in a year ago period.

Net profit in the year jumped 47.1% from a year ago to £41.2 million compared to £28 million and diluted earnings per share climbed to 18.7 pence from 15.1 pence.

Asian Markets

Nikkei in Tokyo fell the most in five weeks after the dollar retreated from its recent highs. In the session, the dollar touched to a 13-year high.

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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