While you were sleeping: Oil gains, stocks slip

Friday 23rd December 2016

Equities on both sides of the Atlantic slipped, as did the US dollar, while oil moved higher amid optimism that producers will start easing output, as agreed, next month.

"The announcements coming from Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Iraq, and Russia are all encouraging signs that they will abide by the cut and hopefully other countries will follow suit," OPEC member Kuwait's oil minister Essam Abdul Mohsen Al-Marzouq told reporters, according to Reuters.

Wall Street, trading near record highs, slipped. In 1.29pm trading in New York, the Dow Jones Industrial Average declined 0.2 percent, while the Nasdaq Composite Index slid 0.5 percent. In 1.14pm trading, the Standard & Poor’s 500 Index fell 0.3 percent.

The Dow fell as slides in shares of Wal-Mart and those of Apple, down 2.1 percent and 0.9 percent respectively, outweighed advances in shares of Verizon and those of Chevron, recently trading 1.2 percent and 0.8 percent higher respectively.

Shares of Red Hat sank, trading 12.9 percent lower as of 1.10pm in New York, after the software maker posted disappointing quarterly revenue and announced the departure of its chief financial officer.

Shares of Conagra Brands climbed to a record high after the packaged-foods company posted better-than-expected quarterly profit amid its move away from discounts and promotions.

Its gross profit margin increased 270 basis points to 31.0 percent in the second quarter, the company said in a statement.

“Our increased focus and discipline on driving value over volume are enabling us to expand our margins as we build a higher-quality revenue base, improve efficiency, and deliver stronger, more consistent performance,” Sean Connolly, chief executive officer of Conagra Brands, said in the statement.

Shares of Conagra rallied, trading 2.7 percent higher at US$39.03 as of 12.08pm in New York. Earlier the stock touched a record high US$39.40.

Also climbing were shares of Weight Watchers International. Oprah Winfrey, the diet company's backer and most famous customer, announced that she'd lost 40 pounds using the program, Bloomberg reported.

New TV ads featuring Winfrey, who bought a stake in the struggling company and joined the board last year, tout her weight loss, according to Bloomberg.

The stock, which traded 12.3 percent higher as of 12.35pm, had slumped 54 percent this year before Thursday’s rally.

In the latest US economic data, a Commerce Department report showed gross domestic product rose at a 3.5 percent annualised rate in the three months ended in September. That’s up from a prior estimate of 3.2 percent and better than economists had expected.

A separate Commerce Department report showed consumer spending rose 0.2 percent last month, following a 0.4 percent gain in October.

Accelerating US economic growth will help bolster the greenback.

“Going into next year, we are confident the dollar will continue to make headway,” Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh, told Bloomberg. “It will be the currency that appreciates in 2017, it’s just a question of how much.”

In Europe, the Stoxx 600 Index ended the day with a 0.2 percent decrease from the previous close. The UK’s FTSE 100 Index rose 0.3 percent, while France’s CAC 40 Index eked out a 0.02 percent gain. Germany’s DAX Index slipped 0.1 percent.

BusinessDesk.co.nz

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