While you were sleeping: Cautiously confident

Wednesday 4th November 2015

Wall Street was mixed, as energy shares rose with the price of oil, while shares of AIG dropped on disappointing earnings.

In New York trading at about 10.38am, the Dow Jones industrial average rose 0.3 percent. At about 10.23am trading, the Standard & Poor’s 500 Index inched 0.03 percent lower and the Nasdaq Composite Index edged 0.05 percent lower.

Gains in shares of Chevron and those of DuPoint, last up 2.6 percent and 1.2 percent respectively, led the Dow higher.

Oil gained as investors focused on concerns about risks to supply in Libya and Brazil, bolstering energy shares.

With an interest rate increase still a possibility this year, investors are eyeing key Federal Reserve officials speaking on Wednesday, including Chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed chief William Dudley.

A Commerce Department showed US factory orders slid more than expected, down 1.0 percent in September, following a downwardly revised 2.1 percent drop in August.

“It’s all about confidence,” Teis Knuthsen, chief investment officer at Saxo Bank’s private-banking unit in Hellerup, Denmark, told Bloomberg. “People are still cautious, but now they’re slowly becoming less sceptical regarding the global economic recovery. If corporates also start to show strength in this kind of environment, that’s all you need to support a year-end rally. For now I still think we need more evidence.”

Corporations continued to see value. US-traded shares of Dublin-based King Digital jumped, last up 14 percent, after Activision Blizzard agreed to buy the creator of "Candy Crush Saga" for US$5.9 billion.

“It’s a very astute investment from a tax point of view,” Robert Willens, president of Robert Willens, told Bloomberg.

The latest earnings were mixed. Shares of AIG dropped, last 4.4 percent weaker, after the insurer reported a quarterly profit that fell short of expectations. So did Archer Daniels Midland, sinking its shares 8.9 percent.

Meanwhile, US car makers are enjoying a stellar year, posting better-than-expected sales for the month of October. Indeed, the nation’s auto industry is on track for a record year of annual sales, General Motors said, Reuters reported.

GM’s total and retail deliveries – sales to individual customers – climbed 16 percent compared with a year ago, outpacing a very strong industry, and the company’s retail market share has now climbed for seven consecutive months versus 2014, the company said in a statement.

US Treasuries declined, pushing yields on the 10-year note three basis points higher to 2.20 percent.

"We’re seeing the market start to reprice after last week’s Fed comments," Sean Simko, who manages US$8 billion at SEI Investments Co in Oaks, Pennsylvania, told Bloomberg. "This week you’re going to see the market trend a little bit higher in yield.”

In Europe, the Stoxx 600 Index finished the day with a 0.4 percent gain from the previous close. France’s CAC 40 Index added 0.1 percent, while the UK’s FTSE 100 Index rose 0.2 percent. Germany’s DAX Index fell 0.2 percent.

BusinessDesk.co.nz

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