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Market Update

S&P 500 and DAX Down on Growth Worries and Lackluster Earnings


Author: Nichole Harper
ticker.com
Last Update: 6:15 PM ET October 27 2015

[4:10 PM New York City, New York Market indexes on Wall Street remained in consolidation phase as more companies announce earnings. Durable spending declined for the second month in a row in September, raising the prospect of a sharp slowdown in the U.S. economic growth. Walgreens agreed to acquire Rite Aid for $9.4 billion in cash.

Market indexes in New York and in Europe traded lower and investors digested a barrage of earnings report across Atlantic.

Weaker-than-expected earnings from Ford Motor Company and other companies knocked market sentiment. In addition, durable spending declined for the second month in a row, raising the prospect of sharp economic growth.

Durable goods orders in September fell 1.2% to $231.1 billion and declined for the second month in a row followed by 3% fall in August.

Orders excluding transportation fell 0.4% and defense dropped 2%, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index slipped 115.33 or 1.1% to 10,832.46.

S&P 500 index fell 9.97 or 0.5% to 2,061.49 and the Nasdaq Composite Index slid 15.39 or 0.3% to 5,018.63.

Crude oil in New York dropped $1.07 to $42.91 a barrel and gold rose $3.18 to $1,166.22 an ounce.

U.S. Movers

Ford Motor Company (F) slumped 4.7% or 73 cents to $14.95 after the auto maker reported revenues in the third-quarter ending in September jumped 9.1% from a year ago to $35.8 billion.

Net income in the quarter more than double to $1.91 billion or 48 cents per diluted share compared to $835 million or 45 cents from the same quarter last year.

The company revenues in North America surged 89% to $2.7 billion from a year ago. Revenues in Europe soared 17% but fell in South America, the Middle East and Asia.

Ford reaffirmed forecast to report full-year pre-tax profit between $8.5 billion and $9.5 billion.

Merck & Co., Inc (MRK) rose 37 cents to $53.20 after the health care company said revenues in the third-quarter ending in September declined 5% from a year ago to $10.07 billion.

Net income in the quarter doubled to $1.83 billion or 64 cents per diluted share compared to $895 million or 31 cents from the same quarter last year.

Merck lifted earnings per share forecast for the year between $3.55 and $3.60 from the earlier estimated range of $3.45 to $3.55 per share.

Pfizer Inc (PFE) increased 2.1% or 71 cents to $34.87 after the biopharmaceutical company reported revenues in the third-quarter ending in September slipped 2% from a year ago to $12.09 billion.

Net income in the quarter plunged 20% to $2.13 billion or 34 cents per diluted share compared to $2.67 million or 42 cents from the same quarter last year.

Walgreens Boots Alliance (WBA) soared 5.9% or $5.30 to $94.78 after the drug store chain agreed to buy Rite Aid Corporation.

Walgreens is schedule to release its fourth-quarter result tomorrow and Rite Aid Corporation stock surged 39.2% to $8.46.

European Markets

The seasonally adjusted U.K. service sector index jumped 2.8% in August from a year ago month. The largest contribution was from business services, finance, distribution, hotels and restaurants.

Between July and August, service sector output was flat following an increase of 0.2% between June and July, Office of the National Statistics reported.

Separately, the agency said U.K. GDP in preliminary estimate showed a decline in the third-quarter to 0.5% from 0.7% in second-quarter and from 2.3% in a 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