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Market Update

U.S. Extends World Markets Advance

Author: Nichole Harper
Last Update: 12:13 PM ET March 06 2014

12:10 PM New York – U.S. indexes extended world markets advance and the yen, the euro and the ruble turned lower against a dollar. European Central Bank left its key lending rate at record 0.25%. Staples plans to close 12% of retail stores and sales decline for the fifth quarter in a row.

U.S. markets extended world markets advance after the European Central Bank left its key interest rate on hold and Japanese yen weakened.

Ukraine crisis took another turn after Crimea’s parliament set March 16 as a date for region’s referendum. The public vote is expected to approve the accession of Crimea to Russia.

Russian ruble declined 0.7% and Russia’s benchmark Micex index declined 2.5%.

S&P 500 index increased 7.10 or 0.4% to 1,880.81 and the Nasdaq Composite Index added 9.47 or 0.2% to 4,367.44.

European Markets

European Central Bank left its key lending rate on hold at a record low of 0.25% and the central bank is running out of options to stimulate the economy further.

President Mario Draghi of the European Central Bank said after the decision in a news conference that the euro zone economy is recovering at a “moderate” pace.

Draghi added that the euro zone is likely to see a prolong period of low inflation and that the central bank plans to leave its interest rate low for an extended period.

The central bank also forecasted that the annual inflation rate would gradually rise from 0.8% to 1.5% in 2016. The bank also estimated the inflation to pick up to 1.6% rate in the final quarter of that year.

The ECB is not likely to repeat the Federal Reserve plan of purchasing government or corporate bonds.

The European corporations rely more on bank loans and less on bonds and The Bundesbank in Germany is opposed to any government bond purchase.

Separate reports from the region also supported the argument for another rate cut. German factory orders rose 1.2% in January from December. French unemployment in December quarter declined to 9.8% from 99%.

In London trading, FTSE 100 index gained 0.3% or 20.98 to 6,796.40 and in Frankfurt the DAX index edged up 0.04% or 3.70 to 9,545.72.

In Paris, CAC 40 index jumped 0.6% or 27.10 to 4,418.35.

U.S. Stocks in Review

Costco Wholesale Corporation (COST) dropped 3.2% or $3.73 to $112.74 after the discount stores stated total sales in the second-quarter ending on February 16 climbed 6.2% to $25.8 billion. Comparable store sales in the quarter rose 4%.

Net income in the quarter declined 15.4% to $463 million or $1.05 a diluted share compared to $547 million or $1.24.

Joy Global Inc (JOY) climbed 3.5% or $1.91 to $57.70 after the mining equipment maker reported said net sales in the first-quarter ending in January declined 27% to $839 million.

Net income in the quarter plunged 65.6% to $48.9 million or 48 cents a diluted share compared to $142.1 million or $1.33.

The Kroger Co (KR) increased 2% or 89 cents to $44.50 after the retailer total sales in the fourth-quarter ending in December dropped 3.7% to $23.2 billion. Same store sales advanced 4.8%.

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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