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Market Update

U.S. Housing Starts Fall and Production Growth Slows, World Markets Advance

Author: Nichole Harper
Last Update: 2:33 PM ET February 18 2015

2:35 PM New York – U.S. stocks traded sideways and investors focused on domestic earnings and overlooked Friday deadline for Greece to submit loan extension. U.S. housing starts declined 2% in January and permits declined 0.7% and industrial production gained 0.2%.

Stocks traded sideways investors shifted focus to domestic earnings and European indexes closed at a seven-year high after Greece was said to prepare to apply loan extension with the revision in terms.

European markets have moved beyond the Greek debt talk outcome as most investors believe that the European Central Bank has erected sufficiently strong firewall to prevent the Greek exit contagion spreading to other countries.

In the U.S., housing permits in January fell 0.7% from the revised December rate but soared 8.1% from a year ago month to 1,053,000.

Housing starts in January dropped 2% to 1,065,000 from revised December estimate, the Department of Commerce said today.

The Producer Price Index decreased 0.8% in January on a seasonally adjusted basis followed by 0.2% decrease in December and in November, the U.S. Department of Labor announced.

January industrial production rose 0.2% after falling 0.3% in December. Manufacturing production increased 0.2% and mining dropped 1%, the U.S. Federal Reserve Bank reported.

On Wall Street trading, Tollbooth Strategy Index edged up 0.08% or 8.20 to 10,529.48.

S&P 500 index fell 4.77 or 0.2% to 2,095.76 and the Nasdaq Composite Index edged down 0.62 or 0.01% to 4,898.65.

U.S. Movers

Duke Energy Corp (DUK) rose 19 cents to $79.58 after the electric power producer reported said total revenues in the year ending in December jumped 5.1% to $23.92 billion from a year ago period.

Net income in the quarter tumbled 29.3% to $1.88 billion or $2.66 per diluted share compared to $2.66 billion or $3.76 from the same quarter last year.

Fossil Group Inc (FOSL) tumbled 18.2% or $18.52 to $80.83 after the fashion accessories retailer stated net sales in the fourth-quarter ending in December were nearly flat at $1.06 billion from a year ago period.

Net income in the quarter jumped 3.8% to $154.1 million or $3 per diluted share compared to $148.5 million or $2.68 from the same quarter last year. Stock plunged after earnings per share missed the estimate of at $3.07 a share and annual outlook disappointed some analysts.

For the first quarter, Fossil estimated earnings per share between 59 cents and 69 cents and forecasted earnings per share for the fiscal 2015 in the range of $5.45 to $6.05 per share.

European Markets

European market indexes traded at a seven-year high on the hopes that Greece debt talks will produce a positive outcome as early as this week.

Expectations ran high on trading desks of London and Frankfurt that Greece will seek an extension of loan and meet the demands laid out by international creditors.

After a month of tense negotiation between Greek leaders and euro zone finance and political leaders, Greece is expected to ask for additional loan of 7 billion euros without rollback of austerity measures.

However, market sentiment can change quickly if Greece fails to meet the demand laid out by the IMF and European Central Bank. There are still more than 50% chance that Greece will push for additional loan without the austerity measures, as stressed by Greece’s finance and prime ministers.

In London trading, FTSE 100 index slid 0.2% or 16.38 to 6,881.75 and in Frankfurt the DAX index gained 0.4% or 41.09 to 10,936.71.

In Paris, CAC 40 index jumped 0.8% or 37.46 to 4,791.45.

Credit Agricole SA climbed 6.3% to €12.73 after the France-based bank and insurance company reported revenues in the year ending in December dropped 1.1% to €15.85 billion from €15.68 billion a year ago period.

Net income in the year declined 6.8% from a year ago to €2.34 billion compared to €2.51 billion and diluted loss per share increased to €0.65 from €0.18.

The bank added in Italy, as of December loan outstanding amounted to €33.3 billion, an increase of 0.8% and deposits amounted to €35.9 billion, mainly due to an increase of new customer inflows of 1.7% in the final quarter of the year.

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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