Sharechat Logo

While you were sleeping: Oil slide weighs on Wall St

Friday 5th May 2017

Text too small?

Wall Street seesawed as optimism about better-than-expected corporate earnings offset a decline in energy stocks which dropped with the price of oil. 

 

 

Health care stocks rose after the US House of Representatives approved a controversial health care bill in a narrow victory that will send it to the Senate. The bill, championed by US President Donald Trump, is seen as standing little chance of passing in its current form.

 

 

Twenty Republicans voted against the bill, and no Democrats backed it, according to Bloomberg.

 

 

In 2.28pm trading in New York, the Dow Jones Industrial Average slipped 0.1 percent, while the Nasdaq Composite Index edged 0.02 percent lower. In 2.13pm trading, the Standard & Poor’s 500 Index also inched 0.02 percent lower.

 

 

The Dow fell as slides in shares of Chevron and those of Caterpillar, down 2.2 percent and 1.9 percent respectively, outweighed gains in shares of Coca-Cola and those of McDonald’s recently up 0.9 percent and 0.7 percent respectively.

 

 

Oil prices slid, moving below US$50 a barrel, amid concern that current efforts to reduce the global glut aren’t sufficient.

 

 

"Evidence is mounting that the OPEC agreement, and the market’s reaction, were much ado about nothing," John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, told Bloomberg. 

 

 

In fresh evidence of a solid US labour market before Friday’s nonfarm payrolls data, a Labour Department report showed that initial claims for state unemployment benefits declined 19,000 to a seasonally adjusted 238,000 for the week ended April 29.

 

 

"The tightening labour market is raising costs but firms are failing to improve productivity to offset those increases," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters. "There simply is no reserve army of the unemployed or underemployed to call on and hours worked are already fairly high.”

 

 

In the latest US corporate results, shares of Kellogg rose after the world’s biggest maker of cereal posted quarterly earning that surpassed expectations. The stock traded 1.5 percent higher as of 1.40pm in New York.

 

 

Kellogg reported diluted earnings per share of 74 US cents a share in the quarter ended April 1, up from 49 US cents a share in the year-earlier quarter. 

 

 

"In the first quarter, we managed through an unusually challenging environment for packaged food companies, including a period of industry-wide softening of consumption trends," John Bryant, Kellogg’s chief executive officer, said in a statement. 

 

 

“We got off to a slow start on net sales,” Bryant noted, “but we expect sequential improvement in coming quarters, and our productivity initiatives enabled us to stay on track toward our full-year 2017 forecasts.” 

 

 

Meanwhile, rival Kraft Heinz posted quarterly revenue and earnings that “primarily reflected lower consumption versus the prior-year period in North America.” 

 

 

Net sales in the quarter ended April 1 slid 3.1 percent to US$6.36 billion, the company said in a statement. It posted earnings of 84 US cents a share, excluding some items, for the quarter, up from 73 US cents in the year earlier but below analysts' expectations for 85 US cents a share. 

 

 

"Although our top line results in the first quarter reflect a slow start to the year, we remain on track with our key initiatives," Kraft Heinz CEO Bernardo Hees said in the statement. "We are delivering product innovations, renovations and geographic expansion that positions Kraft Heinz to drive organic sales growth for the balance of 2017 and beyond.”

 

 

“We also have good visibility on costs, savings and what we must do to deliver another year of profitable growth,” Hees added. 

 

 

Kraft Heinz shares traded 0.1 percent stronger at US$89.20 as of 1.20pm in New York. Earlier in the day the stock fell as low as US$87.14 and rose as high as US$91.80.

 

 

In Europe the Stoxx 600 Index ended the session with a 0.7 percent gain from the previous close, bolstered by stronger-than-expected earnings including from Anheuser-Busch InBev.

 

 

The UK’s FTSE 100 Index rose 0.2 percent, Germany’s DAX Index climbed 1 percent, while France’s CAC40 Index rallied 1.4 percent.

 

 

Following a TV debate between French presidential candidates Emmanuel Macron and Marine Le Pen on Wednesday night, polls showed Macron was seen as the winner. 

 

 

(BusinessDesk)

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report