European stocks broadly lower ahead of earnings; Dax down 0.32%

Investing.com - European stocks were broadly lower on Tuesday, as markets were jittery ahead of upcoming earnings reports, although upbeat German trade data lent support, as well as comments made by European Central Bank Vice President Benoit Coeure over the weekend.

During European morning trade, the DJ Euro Stoxx 50 fell 0.24%, France’s CAC 40 edged down 0.15%, while Germany’s DAX slid 0.32%.

Official data earlier showed that Germay''s trade surplus widened to €18.8 billion in May, from €17.2 billion in April whose figure was revised down from a previously estimated €17.7 billion. Analysts had expected the trade surplus to narrow to €16.4 billion in May.

European equities found support on Monday after ECB Vice President Benoit Coeure said Sunday that rates will remain on hold for an extended period to ensure monetary stability in the euro zone.

The ECB left all rates on hold at its meeting last Thursday, after cutting rates to record lows in June in a bid to stave off the threat of persistently low inflation in the region.

Financial stocks were broadly lower, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) retreated 0.48% and 0.85%, while Germany''s Deutsche Bank (XETRA:DBKGn) tumbled 1.29%.

Among peripheral lenders, Italy''s Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) declined 0.81% and 0.82% respectively, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) slid 0.31% and 0.81%.

Elsewhere, Air France-KLM (PARIS:AIRF) plunged 5.38% after the airline cut its full-year earnings forecast amid overcapacity on North American and Asian routes, poor demand for freight and the fallout from a dispute with Venezuela.

In London, FTSE 100 slipped 0.22%, weighed by losses in the financial sector.

Shares in Barclays (LONDON:BARC) dipped 0.06% and HSBC Holdings (LONDON:HSBA) edged down 0.18%, while the Royal Bank of Scotland (LONDON:RBS) dropped 0.88% and Lloyds Banking (LONDON:LLOY) lost 1.08%.

Meanwhile, mining stocks were mostly higher as Bhp Billiton (LONDON:BLT) rose 0.28% and Glencore Xstrata (LONDON:GLEN) jumped 1.05%, while Fresnillo (LONDON:FRES) and Rio Tinto (LONDON:RIO) saw shares rally 1.24% and 1.25% respectively.

Marks & Spencer (LONDON:MKS) added to gains, up 0.78%, after the clothing retailer said quarterly revenue at its food unit climbed 1.7%. The company also reported a 12th straight quarterly drop in non-food sales.

In the U.S., equity markets pointed to a steady to lower open. The Dow 30 futures pointed to a 0.07% loss, S&P 500 futuressignaled a 0.13% fall, while the Nasdaq 100 futures indicated a 0.03% dip.

Source:

www.jpost.com

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S&P 500 streak broken by US stock losses

Broad selling in tech stocks pulled US markets lower on Wednesday, cutting short a six-day streak of gains by the S&P 500.

Boeing, Dow Chemical and Delta Air Lines registered strong gains on better than expected quarterly reports, but their impact was offset by poor performances from AT&T and biotech giant Amgen.

The Dow Jones Industrial Average fell 12.72 points (0.08 percent) to 16 501.65.

The S&P 500 dropped 4.16 (0.22 percent) to 1 875.39, while the Nasdaq Composite lost 34.49 (0.83 percent) at 4 126.97.

"Some disappointing economic reports domestically and from China put a wrench in the bulls' plans to extend the recent rally," said Charles Schwab & Co., citing a plunge in US new-home sales in March.

Boeing shares jumped 2.4 percent after core earnings per share handily beat forecasts and the company raised its 2014 outlook. The aerospace giant was the Dow's best gainer.

Dow Chemical rose 0.9 percent after reporting a 65 percent leap in first-quarter profit.

Delta's strong earnings boosted its shares 6.1 percent

But weakness in telecoms shares helped pull back the overall market. AT&T sank 3.8 percent after slightly missing revenue forecasts in its first-quarter report released late on Tuesday.

Falling with it was Verizon, down 1.0 percent.

Amgen dived 5.0 percent after earnings missed expectations.

Procter and Gamble shares lost 0.3 percent after its profits edged 1.7 percent higher amid what it called a tough competitive environment.

Also hit with selling were major tech firms, including Google (-1.5 percent), Microsoft (-0.8 percent), Facebook (-2.7 percent) and Apple (-1.3 percent).

After the close, Facebook reported profit nearly tripled to $642-million in the first quarter on a 72 percent surge in revenues. Facebook shares rebounded 2.7 percent in after-hours trade.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.69 percent from 2.73 percent late on Tuesday, while the 30-year slid to 3.47 percent from 3.50 percent. Bond prices and yields move inversely.

Source:

business.iafrica.com

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What to look for in earnings

Earnings, earnings, earnings. This week, we will hear from some 150+ S&P 500 companies, so prepare yourself.

Expect to hear the same song. For the most part, earnings will beat the expectations. Analysts will sing about the ongoing recovery — now notching in at 5 years, companies will cite improvements in cost structure as most of the reasons for the better bottom line.

Getty Images

Traders on the floor of the New York Stock Exchange.

Investors will and should look for improving revenue, or top-line, growth — numbers to really tell the story of what the future looks like.

Read MoreThis pushes S&P toward 2000: Jim Paulsen

Investors should question how much longer companies can "restructure" — code for layoffs and cost reductions. If the economy IS improving, then we should see companies committing to new hires and new investments in capital expenditures (capex) which should translate into a strengthening GDP in the coming quarter and quarters. Investors will also be listening for new opportunities for companies to grow their businesses.

The heat is on. After the market's recent selloff — a selloff that was muted at best in the broader market — investors will be a bit more critical, I think. We realize that as Federal Reserve Chair Janet Yellen pledges to keep interest rates near zero for the foreseeable future to continue to help the economy, this will continue to blur the lines between reality and La-La Land. Investor should be questioning what this REALLY says about the health of the U.S. recovery.

Remember, the Fed suggests that this recovery will go on for two more years — and it may if they continue to feed the beast — while the Congressional Budget Office forecasts an expansion through 2017. 

Read MoreEarnings are beating estimates—but don't be fooled

So far, earnings have been mixed to mediocre at best. But saying that, I have to recognize that almost two-thirds of the companies that have reported have "beaten the estimate." Expect that to continue. No longer should investors expect a "rising tide to lift all boats" — it is becoming a much more stock-specific story. Misses will be punished individually as investors/traders look for indications that any news is company specific, thus not punishing whole sectors at a time.

Profits will have to move legitimately higher to sustain current valuations — otherwise look for the market to test lower once again. I do not believe that the weakness is over yet. I remain in the camp that investors will test again — no matter what the Fed does — because the reality of a slowly improving economy does not dictate some of the prices we are seeing. The recent rout in some of the growth names defines this as the momentum guys realize the complete disconnect between prices and fundamentals. 

Read MoreWhat can keep momentum going: Art Cashin

Yes, the future does look better but so many things have to fall into place. Until investors are reassured that they are falling into place, the broader market will be held in check. The Nasdaq and Russell remain well below their 50-day-moving averages — a clear negative for investor psyche. Until those markets regain a sense of strength, the broader market will remain cautious. Yes, the Dow, S&P and transports are north of their 50-day-moving averages — suggesting that the "safety trade" in on — but the question remains: Are they out of sync with the economy as investors search for equity stability?

Commentary by Kenny Polcari, director of NYSE floor operations at O'Neil Securities. He is also a CNBC contributor, often appearing on "Power Lunch." Follow Kenny on Twitter @kennypolcari and visit him atkennypolcari.com. 

Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities or its affiliates.

Source:

www.cnbc.com

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Wall Street climbs for second day, Fed minutes on tap

Traders work on the floor of the New York Stock Exchange April 9, 2014.

(Reuters) - U.S. stocks rose for a second session on Wednesday, buoyed by a rise in Alcoa (AA.N) shares ahead of the release of minutes from the latest Federal Open Market Committee meeting.

Alcoa Inc (AA.N) gained 3.6 percent to $12.98 as the best performer on the S&P 500 after it reported a decline in first quarter adjusted profit but earnings still came in ahead of analysts' expectations.

S&P 500 companies' first-quarter earnings are projected to have increased just 1 percent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when profit growth was estimated at 6.5 percent.

U.S. stocks had advanced in the prior session to snap a three-day losing streak as investors bought beaten-down social media and Internet shares.

Despite the three-day selloff, the benchmark S&P 500 index .SPX managed to hold above its 50-day moving average around 1,840, a key support level. The index has successfully defended the 1,840 area several times over the past month.

The day's gains were gain led by Internet and biotechnology stocks that had tumbled recently.

The Nasdaq biotechnology index .NBI was up 2.2 percent at 2,409.72 and the Global X social media index (SOCL.O) was up 1.8 percent at $18.83.

"In recent days, in general, large caps outperformed small caps, and low-beta companies outperformed those with higher betas," said U.S. Bank Wealth Management's equity research team, in a note to clients. Low beta refers to less volatile stocks that also offer less potential return.

"While investor sentiment remains fragile, we continue to maintain a constructive outlook for equities, believing that the path of least resistance is still up."

The Dow Jones industrial average .DJI rose 55.81 points or 0.34 percent, to 16,311.95, the S&P 500 .SPX gained 5.55 points or 0.3 percent, to 1,857.51 and the Nasdaq Composite .IXIC added 28.137 points or 0.68 percent, to 4,141.123.

Year-to-date, five of the ten S&P 500 Index sectors are up and five are down, according to Wells Fargo Advisors. The utility sector leads the rest with a 9.5 percent increase, while the consumer discretionary sector has been the greatest laggard with a 5.5 percent decline.

The Fed is expected to release the minutes from its March meeting at 2 p.m. (1800 GMT). The Fed needs to be more specific about what economic conditions would prompt it to raise interest rates from current rock-bottom levels, a pair of top Fed officials normally at odds on policy said on Tuesday.

Earnings season gets under way this week, with results due from retailer Bed, Bath & Beyond (BBBY.O) after the close, while financials JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) close out the week with results on Friday.

Investors will be looking at the impact of harsh winter weather on first-quarter earnings, and signs of optimism for the second-quarter.

U.S. wholesale inventories rose at a slower 0.5 percent pace in February, in line with expectations, after a revised 0.8 percent gain in January, which could support views that restocking did not help the economy in the first quarter.

General Motors Co (GM.N) shares lost 2 percent to $33.83. The National Highway Traffic Safety Administration said the automaker is being fined $7,000 a day for missing an April 3 deadline to provide information about its recall of 2.6 million cars for defective ignition switches. Morgan Stanley subsequently cut the stock to "underweight.

Intuitive Surgical Inc (ISRG.O) estimated first-quarter revenue well below analysts' average expectation, mainly due to a 60 percent drop in sales of its flagship da Vinci robot system. Its shares slumped 7 percent to $455.27. The PHLX medical device index .MXZ lost 0.3 percent.

Constant Contact Inc (CTCT.O) surged 27.8 percent to $28.02 after the online marketer said it expects quarterly revenue to rise by more than 15 percent.

Shares of Blackstone-backed hotel chain La Quinta Holdings Inc (LQ.N) made a subdued market debut as investors took the view the stock was fully priced in a crowded IPO market. La Quinta's shares, which priced below the expected range at $17, fell as much as 4 percent in early trading but rose nearly 3 percent to $17.50 by midday.

(Reporting by Angela Moon; Editing by Nick Zieminski)

Source:
www.reuters.com

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