11:25 AM New York – U.S. stocks extended gains after upbeat earnings from Home Depot, Best Buy and TJX. Paris based OECD lowered its global economic growth outlook and said recovery steady but slow. Retailers were in focus on the worries of competitive pressures to offer more than usual discounts.
U.S. stocks extended gains on better-than-expected earnings from Home Depot and Best Buy and TJX Companies.
S&P 500 index increased 1.56 to 1,793.09 and Nasdaq Composite Index added 5.7% to 3,954.77.
In London trading, FTSE 100 index slipped 0.4% or 29.05 to 6,694 and in Frankfurt the DAX index fell 0.2% or 18.66 to 9,207.
In Paris, CAC 40 index dropped 0.9% or 38.75 to 4,282.
Global Growth Outlook Lowered
Global growth outlook was lowered largely on the political stalemate in the U.S. and uncertainty linked to the monetary policy and tapering time table.
The Organization for Economic Cooperation and Development, in its second assessment in the year lowered its global economic outlook and said emerging countries like Brazil and Indonesia are facing sharper declining growth outlooks.
The organization lowered its global growth outlook in the current year to 2.7% and 3.6% in the next year.
The international organization based in Paris had estimate in May global growth outlook at 3.1% this year and 4% in the next year.
The U.S. growth was estimated at 1.7% this year and 2.9% next year and the euro zone is expected to shrink 0.6% this year and grow 1% in the next year. The organization said the growth in the euro zone will not be strong enough to lower the current unemployment rate of 12%.
China’s growth is expected to slow to 7.7% this year and 8.2% in the next year. Japan is expected to grow 1.4% in the current year. India’s growth is expected at 3.4% in the current year and 5.1% in the next year.
U.S. Stocks in Review
Best Buy Co., Inc
plunged 8.7% or $3.72 to $39.82 after the consumer electronics products retailer reported revenue in the third-quarter ending on November 2 slid 0.2% to $9.36 billion.
Comparable store sales in the quarter rose 1.7% but comparable store sales in international segment declined 6.4% and online sales climbed 15.1%.
Net in the quarter swung to $54 million profit or 16 cents a diluted share compared to a net loss of $10 million or 3 cents a share loss.
Revenue in international segment declined 11.3% to $1.52 billion and gross profit dropped 60 basis points to 21.2% from last year.
Best Buy said in a statement that competition may force the retailer to be more promotional than usual and that could hurt margins in the current quarter that generates most revenues. The cautious outlook overshadowed the better-than-expected quarterly earnings.
The Home Depot, Inc
) climbed 2.8% or $2.29 to $82 after the home improvement retailer reported net sales in the third-quarter ending on November 3 jumped 7.4% to $19.5 billion. Comparable store sales in the quarter soared 7.4% and sales for the U.S. stores climbed 8.2%.
Net income in the quarter surged 42.7% to $1.35 billion or 95 cents a diluted share compared to $947 million or 63 cents.
Gross profit for the quarter climbed 8.5% to $6.80 billion and operating income soared 32.3% to $2.29 billion.