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Market Update

U.S. Stocks Look Higher as Banks Lead Earnings Season

Author: Nichole Harper
Last Update: 10:38 AM ET July 14 2015

2:35 PM – Stocks in New York advanced after Wells Fargo and JPMorgan set the pace for the earnings season. European markets edged lower after details of Greek accord emerged. Crude oil rebounded but traded near the low in the year and markets in Asia were cautious ahead of GDP report from China.

Markets in New York advanced after JPMorgan and Wells Fargo reported earnings and indexes in Europe edged lower after details of the Greek accord emerged.

Retail sales in June adjusted for seasonality and calendar fell 0.3% to $442 billion from May but increased 1.4% from a year ago month, the U.S. Department of Commerce said.

Separately, the department reported inventories at the end of May rose 0.3% from April to $1,797.8 billion and jumped 2.4% from a year ago month. Sales in May increased 0.4% to $1,323.6 billion from April but declined 2.2% from a year ago month.

Import price index in June edged down 0.1% compared to 1.2% increase in May. In June, export prices decreased 0.2% following 0.6% increase in May, the U.S. Department of Labor announced.

On Wall Street, Tollbooth Strategy Index fell 0.4% or 41.56 to 10,913.80.

S&P 500 index rose 0.4% or 8.08 to 2,107.71 and the Nasdaq Composite Index gained 0.7% or 34.37 to 5,105.71.

Crude oil in New York increased 74 cents to $52.94 a barrel and gold fell 70 cents to $1,154.70 an ounce.

U.S. Movers

Johnson & Johnson (JNJ) slipped 45 cents to $99.82 after the health care products maker reported sales in the second-quarter ending in June declined 8.8% to $17.8 billion from a year ago period.

Net income in the quarter surged 25.4% to $4.52 billion or $1.61 per diluted share compared to $4.33 billion or $1.51 from the same quarter last year.

The company added domestic sales decreased 2.4% to $8.91 billion and international sales declined 14.3% to $8.88 billion compared to same quarter a year ago.

Worldwide pharmaceutical sales slumped 6.6% to $7.9 billion and consumer sales plunged 7% to $3.5 billion. Sales from medical devices declined 12.2% to $6.36 billion.

Sales in European region tumbled 17.9% and sales in Asia-Pacific and Africa region dropped 6.4% from a year ago period.

For the year, the company forecasted adjusted earnings per share in the range of $6.10 to $6.20 from earlier estimated range of $6.04 to $6.19.

JPMorgan Chase & Co (JPM) gained 49 cents to $68.58 after the investment banking and financial services provider said total net revenue in the second-quarter ending in June dropped 3.5% to $23.81 billion from a year ago period.

Net income in the quarter jumped 5.2% to $6.29 billion or $1.54 per diluted share compared to $5.98 billion or $1.46 from the same quarter last year.

JPMorgan raise $556 billion in capital for clients and $35 billion in credit and capital for government agencies and nonprofit organizations.

The bank also extended $115 billion worth of credit to consumers, $11 billion to small businesses and $314 billion for corporations.

Wells Fargo & Co (WFC) increased 1% or 59 cents to $57.33 after the brokerage financial and bank group reported interest income in the second-quarter ending in June rose 1% to $21.32 billion from a year ago period.

Net income in the quarter fell 1.1% to $5.36 billion or $1.03 per diluted share compared to $5.42 billion or $1.01 from the same quarter last year.

The brokerage group said as of June 30, total deposits for second quarter jumped 4% to $1.2 trillion and investment securities were $340.8 billion, $16 billion higher from last quarter.

As of June, net unrealized available-for-sale securities was $5.7 billion fell from $7.9 billion from March quarter.

European Markets

UK producer prices index for all manufactured products fell 1.5% in June after falling 1.6% in May, Office for National Statistics reported.

Separately, today the department said UK annual inflation measured at consumer prices remained flat in June after rising 0.1% in May.

Industrial output in May fell 0.4% in the euro area and 0.3% in EU28 region from April. In April, production remained stable in the euro area and in EU28, the Statistical Office of the European Communities said.

European markets edged lower after a day of rallying on the hopes that parliaments in the euro zone will approve the latest accord between lenders and Greece.

However, bond market investors are increasingly factoring higher rates for Spain, Portugal and Italy and Greece is likely to face significant hurdles in implementing unpopular reforms.

Also, currency markets in Europe and in New York are looking for Greek discount on the euro and the currency is expected to face more headwinds in the next few months as Greece lags in implementing reforms and may head for another election as early as December.

In London trading, FTSE 100 index fell 0.4% or 23.55 to 6,714.40 and in Frankfurt the DAX index decreased 0.4% or 40.52 to 11,443.86.

In Paris, CAC 40 index slid 0.3% or 12.71 to 4,985.39.

Carillion Plc rose 0.7% to 354.10 pence after the U.K.-based construction services provider forecasted revenue in the first-half ending in June to increase around 96% with earnings ‘in-line with expectations.’

The company added order pipeline remained strong at about £17 billion.

Separately, today the company awarded a contract worth about £80 million from BP to build the operational base and accommodation complex for its Khazzan gas project.

Michael Page International Plc slipped 2.6% to 540.50 pence after the U.K.-based professional staffing services provider reported gross profit in the second-quarter ending in June climbed 6% to £145.3 million from £137.1 million in a year ago period.

Asian Markets

Market indexes in Tokyo traded higher for the second day in a row and investors shifted focus to regional development and earnings announcements next week.

The Nikkei 225 Stock Average jumped 295.56 or 1.5% to 20,385.33 and the broader Topix index increased 25.20 to 1,638.71.

The yen closed at 123.25 against a dollar.

Nikkei average rose for the second day in a row and the index traded above 20,000 mark and yen held firm near its recent lows. Real estate developer,

Ichigo Group reported quarterly revenues to 36% and earnings gained 27%. J. Front retailing said total June sales increased 2.4%.

Sony Corporation slipped 1.2% to 3,485 yen after the diversified conglomerate plans to offer 87.20 million new shares of common stock with an issue price of 3,420.50 yen and also plans to sell 120 billion yen in convertible bonds.

The company intends to use net proceeds of about 188 billion yen to fund the devices segment and the rest for research and development.

Stocks in Mumbai traded lower and the rupee edged higher after wholesale price index declined for the eight month in a row.

The latest wholesale price index decline was driven by the falling energy prices from a year ago, however, on a monthly basis prices have started rising.

Fuel prices declined 10.03% from a year ago month after 10.5% fall in May. And, food prices rise at a slower pace of 2.88% in the month compared to 3.8% rise in May.

However, food prices have been on the rise in the last two months on the late arrival of monsoon and the latest report on consumer inflation showed index rising at 5.4% in June.

The Wholesale price index declined for the eighth month in a row but on a monthly basis food prices are on the rise.

The wholesale price index declined 2.4% in June compared to 2.36% fall in May and 5.66% rise from a year ago month, Ministry of Commerce & Industry said today.

Rupee strengthened 10 paisa to 63.41 against one U.S. dollar.

The Sensex Index fell 28.29 to close at 27,932.90. The CNX Nifty slid 5.55 to 8,454.10.

JSW Steel said crude steel production in first-quarter advanced 10%. NIIT Technologies net surged 36%.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc