Market movers
Dow Jones Industrial: +95 at 13,424
S&P 500: +12 at 1,440
NASDAQ Composite: +20 at 3,064
LONDON (SHARECAST) - Despite warnings from the likes of the Bank of Israel’s governor, Stanley Fisher, regarding the downside risks to global growth forecasts, US stocks made a strong start to the week, boosted by better than expected retail sales and consensus beating results from Citigroup.
Meanwhile, in a speech at the annual meeting of the National Association for Business Economics (NABE), New York Federal Reserve (Fed) president William Dudley reassured his audience that the central bank will only begin to unwind its lax monetary policy once the US recovery is well-anchored.
Dudley was optmistic about the US recovery in 2013 in spite of the market's continuous concerns over the European sovereign debt crisis and the US "fiscal cliff" - the $600bn of tax increases and spending cuts that will come into force in 2013 unless Congress reaches an agreement on the nation's budget deficit.
Dudley insisted that the Fed would have to be sure that the recovery is on solid footing before it changes its monetary policy. "If we were to see some good news on growth I would not expect us to respond in a hasty manner," he said in New York.
On the other hand, it appears as if more could have been done. "With the benefit of hindsight, monetary policy needed to be still more aggressive," Dudley said. "A more front-loaded programme would avoid greater attenuation compared to a policy that started out less aggressive but added stimulus gradually over time."
The NY Fed president denied there was any conflict between the Fed's dual mandate of full employment and price stability because inflation will remain below 2% and the Fed can keep price increases under control by paying interest on excess reserves.
"Only as we became confident that the recovery was securely established would I expect our monetary policy stance to evolve to ensure that it remained appropriate to achievement of our objective: maximum sustainable employment in the context of price stability," he said.
Citigroup gets fixed income boostBanking colossus Citigroup saw revenue from trading fixed income securities surge by just under two-thirds year-on-year in the third quarter, putting a positive sheen on the company's results.
The bank reported earnings per share (EPS) of $1.06, excluding extraordinary items, compared to the 97 cents expected by the market. Revenue came in at $19.4bn.
Including extraordinary items, earnings fell 88% to 15 cents per share compared to $1.23 last year. The one-time items include a tax benefit, a write-down for the disposal of its stake in Smith Barney, and accounting adjustments.
"Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues," said Chief Executive Office Vikram Pandit.
American phone company Sprint Nextel finished lower after Softbank confirmed that it will acquire a 70% share in the company for $20.1bn. The deal will be the largest acquisition ever made by a Japanese company.
According to a statement by Softbank, the operation will take place with a direct purchase of $8bn of Sprint’s treasury stock, while the remaining $12.1bn will be acquired via market transactions.
Softbank says both boards of directors have approved the deal and that they expect the transaction to close in mid-2013.
The deal has put the kibosh on any hopes of Sprint Nextel buying MetroPCS.
Chip-maker pannedAdvanced Micro Devices, a distant second to Intel in the US computer chip manufacturing market, is rumoured to be slashing around one-fifth of its workforce.
In contrast, Texas Instruments was wanted on reports that online retail giant Amazon may buy its mobile devices chip unit. The theory goes that Amazon, which produces the popular Kindle ebook reader device, is looking to move into the smartphone market and deeper into the tablet market.
Blackrock and CarMax rose on the back of positive comments on the companies’ share prices in the latest edition of Barron’s. Toy maker Hasbro, however, eased after Goldman Sachs downgraded the stock to "sell" from "neutral".
Shares of Eli Lilly advanced after the drugs maker released positive results for a late-stage study of a gastric cancer drug. The company also benefitted today from positive broker comments.
Retail sales data boosts GDP tracking estimatesUS retail sales, excluding automobiles, rose 1.1% in September, comfortably beating the consensus expectation of a 0.6% rise. The previous month's reading has been revised down to a rise of 0.8% from a preliminary estimate of 1.0%.
The above data (and revisions) pushed Barclays Research’s tracking estimate for growth in third quarter gross domestic product higher, by 0.2 percentage points, to 2%.
In other economic news, the Empire State Manufacturing Index for October remained in negative territory for the third month in a row, at -6.2, though this was an improvement from September's reading of -10.2. The sub-index for new orders increased to -8.9 from -14.
Business inventories climbed by 0.6% month-on-month in August (Consensus: 0.5%).
Bonds and crude futures fall10-year US Treasuries were down by 1/16 dollars, with yields at the 1.66% mark.
Front month West Texas crude futures were barely changed, down 7 cents at $91.79 a barrel on the NYMEX.
S&P 500 - Risers
Alpha Natural Res (ANR) $8.48 +7.61%
Citigroup Inc. (C) $36.66 +5.50%
PulteGroup Inc. (PHM) $16.40 +5.06%
Cablevision Systems Corp. (CVC) $17.73 +4.85%
American Tower Corp (Reit) (AMT) $75.35 +4.41%
Eli Lilly and Company (LLY) $52.53 +4.12%
Abbott Laboratories (ABT) $72.05 +4.00%
Weyerhaeuser Co. (WY) $27.30 +3.96%
Crown Castle International (CCI) $67.05 +3.71%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
S&P 500 - Fallers
Metropcs Communications Inc. (PCS) $11.33 -4.63%
Harris Corp. (HRS) $46.86 -4.05%
Hasbro Inc (HAS) $37.75 -3.94%
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
CONSOL Energy Inc. (CNX) $34.36 -2.22%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
QEP Resources Inc (QEP) $31.52 -1.50%
Range Resources Corp. (RRC) $70.68 -1.46%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.44 +3.51%
Merck & Co. Inc. (MRK) $46.59 +2.13%
Home Depot Inc. (HD) $60.65 +1.83%
JP Morgan Chase & Co. (JPM) $42.38 +1.83%
Pfizer Inc. (PFE) $25.57 +1.79%
Wal-Mart Stores Inc. (WMT) $77.15 +1.77%
Travelers Company Inc. (TRV) $69.79 +1.56%
Alcoa Inc. (AA) $8.80 +1.27%
Intel Corp. (INTC) $21.73 +1.16%
Procter & Gamble Co. (PG) $68.71 +1.13%
Dow Jones I.A - Fallers
AT&T Inc. (T) $35.21 -1.18%
American Express Co. (AXP) $57.59 -0.52%
Nasdaq 100 - Risers
Virgin Media Inc. (VMED) $31.87 +3.78%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
Texas Instruments Inc (TXN) $28.22 +3.45%
Sandisk Corp. (SNDK) $43.73 +3.43%
Fossil Inc. (FOSL) $85.09 +2.85%
Amgen Inc. (AMGN) $86.22 +2.64%
Baidu Inc. (BIDU) $113.82 +2.34%
Autodesk Inc. (ADSK) $31.90 +2.24%
Monster Beverage Corp (MNST) $58.31 +2.15%
Wynn Resorts Ltd. (WYNN) $116.25 +2.14%
Nasdaq 100 - Fallers
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
Dollar Tree Stores Inc. (DLTR) $40.52 -1.43%
Yahoo! Inc. (YHOO) $15.66 -1.39%
Citrix Systems Inc. (CTXS) $66.79 -1.34%
Costco Wholesale Corp. (COST) $96.51 -1.07%
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