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Market Update

Wall Street Down Ahead of Fed Minutes, Greece in Focus in Europe


Author: Nichole Harper
ticker.com
Last Update: 1:59 PM ET May 20 2015

2:00 PM – Market indexes on Wall Street lacked direction ahead of Fed minutes and investors focused on latest batch of earnings. European markets struggled and Greek lawmakers resisted the next loan payment in June without revisions to agreements with international lenders.

Stocks lacked direction on Wall Street by late afternoon as indexes hovered near record highs and Fed was scheduled to release latest minutes of meeting at 2:00 p.m. ET.

Fed is widely expected to raise rates this year, but the timing and the nature of rate hike has kept market guessing.

In morning trading, investors focused on the latest batch of earnings and Target Corp jumped after the retailer reported better-than-expected sales but Lowe’s reported lower-than-expected sales and earnings.

The recently listed Etsy plunged 23% to $16.25 after the operator of online marketplace for craft goods reported a larger loss in the first quarter as a public company.

On Wall Street, Tollbooth Strategy Index slipped 0.2% or 21.88 to 10,792.67.

S&P 500 index edged down 0.49 to 2,127.37 and the Nasdaq Composite Index edged up 1.34 to 5,071.41.

Crude oil in New York rose 82 cents to $58.81 a barrel and gold gained 0.90 to $1,207.60 an ounce.

Five Banks Agreed to Pay $5.8 Billion to U.S. Fines

Five banks in the U.S. and U.K. were charged with multiple crimes linked to foreign currencies and interest rates violations by state and federal authorities on Wednesday.

The fines totaled more than $5 billion, but many analysts believe that banks got off cheap considering the enormity of violations.

The currency market trades daily $5 trillion and is one of the least regulated markets, prosecutors said today.

The rate ‘rigging’ was done nearly every day for five years to 2012 as traders will agree to a price for buy and sale in advance at the expense of customers.

What is different about these charges is that the current violations are pinned down to the parent companies unlike previous violations stemmed from the banking subsidiaries or smaller divisions at the large banks.

In a sharply worded but standard warning issued by regulators failed to win many critics of the Department of Justice. And, the prearranged deal with the SEC only added to the skepticism on Main Street.

U.S. Movers

Target Corporation (TGT) rose 11 cents to $78.04 after the after the specialty retailer stated net sales in the first-quarter ending on May 2 rose 2.8% to $17.1 billion from a year ago period.

Comparable store sales in the quarter increased 2.3%.

Net earnings in the quarter surged 51.6% to $635 million or 98 cents per diluted share compared to $418 million or 66 cents from the same quarter last year.

The company estimated second quarter 2015 adjusted earnings per share between $1.04 and $1.14, compared to $1.01 in second quarter 2014.

The retailer lifted adjusted earnings per share forecast for the year to between $4.50 and $4.65 compared to prior guidance range of $4.45 to $4.65.

Lowe’s Companies, Inc (LOW) declined 4% or $2.88 to $68.95 after the home improvement retailer said net sales in the first-quarter ending on May 1 jumped 5.4% to $14.1 billion from a year ago period.

Comparable store sales in the quarter rose 5.2%.

Net earnings in the quarter advanced 7.8% to $673 million or 70 cents per diluted share compared to $624 million or 61 cents from the same quarter last year.

European Markets

Seasonally adjusted construction activities in March rose 0.8% in euro area and 1.5% in the wider region of EU28 compared to a month ago, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index edged up 4.47 to 6,999.57 and in Frankfurt the DAX index decreased 0.4% or 50.99 to 11,802.34.

In Paris, CAC 40 index fell 0.3% or 16.97 to 5,100.33.

Altice SA climbed 8.2% to €125.50 after the France-based cable and wireless services provider agreed to acquire controlling stake of 70% in the U.S.-based privately held cable operator Suddenlink Communications for $9.1 billion.

However, BC Partners and CPP Investment will retain their stake of 30% in Suddenlink.

Altice operates in Europe and in the Caribbean countries with about 6.5 million of fixed-line customers and 22.5 million wireless customers.

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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