On 23 July, 2015 – Most stock indices retreated on mixed earnings news

Investor focus has shifted from Greece, which cleared another hurdle after the government approved the second set of reform measures, paving the way for the country to start bailout negotiations with its creditors.
United States
Stocks declined for the third straight day on Thursday after disappointing results and forecasts from companies including 3M and Caterpillar added to concerns about the US profit outlook. The Dow Jones industrials lost 0.7 percent, the S&P declined 0.6 percent and the Nasdaq was 0.5 percent lower.
3M and Caterpillar were down after both cut their sales forecasts. Miner Freeport-McMoRan plunged as metals prices continued to retreat. American Express declined after it said expenses are poised to rise. GM jumped as rising truck sales boosted profits. SanDisk surged after better than estimated earnings. Dow Chemical retreated after second quarter sales were below estimates.
Transportation companies including Union Pacific sank for the third time in four days. The railroad’s chief financial officer said profits this year are unlikely to grow after 2014’s record. Kansas City Southern and Norfolk Southern also were lower. United Rentals dropped to its lowest since November 2013, pacing declines with Caterpillar and 3M in the industrials group. The rental company cut its 2015 revenue outlook. Qualcomm retreated after posting its biggest sales decline since 2009, helping to offset SanDisk’s rally. Google and Facebook slid. Apple was little changed, erasing an earlier 1.5% climb, after its largest retreat in almost 18 months. Semiconductors climbed for the first time in five sessions as Skyworks Solutions and Micron Technology rallied more. Texas Instruments also advanced.
Starbucks profits for the quarter rose to US$626.7 million or 41 US cents per share from US$512.6 million or 34 US cents per share, a year ago. Revenues jumped to US$4.9 billion from US$4.32 billion. Amazon.com reported a net profit of US$92 million or 19 US cents per share in the three months to the end of June. Revenues climbed 20% from a year earlier to US$23.2 billion.
Investors in US markets are carefully monitoring economic reports for clues on when the Federal Reserve will start raising interest rates. Data today showed jobless claims plunging to the lowest level in four decades. A separate report said the June index of leading economic indicators climbed more than forecast as historically low borrowing costs and a rebound in housing propelled growth.
Gold at the afternoon London fixing was up US$8.80 to US$1,097.40. Copper futures were down 2.2% to US$2.37. WTI spot crude was down 50 US cents to US$48.69. Dated Brent spot crude was down 80 US cents to US$55.33. The US dollar was up against the pound and the Australian dollar. It was virtually unchanged against the Canadian dollar. However, it declined against the euro, yen and the Swiss franc. The Dollar Index was down 0.4%. The yield on US Treasury 30 year bond was down 7 basis points to 2.97% while the yield on the 10 year note declined 6 basis points to 2.27%.
Europe
Most stock indices retreated Thursday for a third day. Investors have shifted their focus to corporate earnings as concerns over Greece continue to ease. Chip makers bounced back from Wednesday’s weakness which was sparked by the disappointing forecast from Apple. The FTSE slipped 0.2% and the DAX was 0.1% lower. However, the CAC edged up 0.1% and the SMI added 1.0%.
Greece cleared another hurdle after the government approved the second set of reform measures early Thursday. Prime Minister Alexis Tsipras is seeking to close a deal that will offer up to €86 billion debt even as the country faces protests and violence. The reforms, which are the final requirement before the country can once again start bailout negotiations with its creditors, included lifting liquidity of banks and deposit security.
Software AG surged after the business software firm confirmed its 2015 outlook and posted an increase in net income for the second quarter to €19.9 million from €14.2 million last year. STMicroelectronics declined despite a better than expected second quarter earnings report. Infineon Technologies rebounded from yesterday’s pull back. The Publicis Groupe declined after saying that its net income for the first half of 2015 was €363 million or €1.59 per share, up from €260 million or €1.14 euros per share for the corresponding period in 2014.
SABMiller was down after its quarterly sales missed estimates. Aberdeen Asset Management sank after the fund manager reported net outflows of £9.9 billion in the three months to June 30. Pearson gained after it agreed to sell its FT Group to Nikkei for £844 million pounds. Credit Suisse Group rallied after reporting a better than expected second quarter profit after a 700 million Swiss franc loss in the year ago period. Syngenta dropped after it reported that its net income for the first half of the year slid 12%. Unilever climbed after reporting higher than expected quarterly sales.
UK June retail sales declined 0.2% on the month, reversing a 0.3% increase in May. This was the first drop in three months. Spain’s jobless rate declined to a near four-year low in the second quarter, to 22.37% from 23.78% in the first quarter. This is the lowest rate since the third quarter of 2011 when it was 21.28%.
Asia Pacific
Asian stocks closed mixed in lackluster trading on Thursday. Chinese shares continued their recovery rally as a result of government support and purchases by funds and large shareholders. Stocks outside China, Hong Kong and Japan ended mostly lower after disappointing earnings from tech giants weighed on US stocks overnight. Weak commodity prices, mixed regional data and expectations that the Federal Reserve is on track to raise interest rates this year also kept investors in a defensive mood.
The Shanghai Composite was up 2.4% as it extended gains for the sixth consecutive session after state media joined the chorus with comments and editorials reaffirming support for the market. China Securities Finance Corp, the state margin lender, has denied reducing its holdings in listed companies, further aiding investor sentiment. The Hang Seng added 0.5%.
The Nikkei was up 0.4% thanks to a weaker yen and optimism over improved corporate earnings underpinning investor sentiment. ANA Holdings and Japan Airlines rallied on expectations the latest fall in oil prices will reduce fuel costs. Energy explorer Inpex dropped. Nidec advanced after posting strong quarterly results. Eisai tumbled after an experimental Alzheimer’s drug it co-developed with Biogen Idec fell short of clinical significance on two key measures of efficacy. Toshiba retreated extending losses from the previous session after a US investor reportedly sued the company for damages over its recent stock price plunge following the accounting scandal. Japan’s trade deficit narrowed to ¥69.045 billion in June as exports rebounded and imports remained subdued thanks to falling commodity prices.
Both the S&P/ASX and All Ordinaries declined 0.4%, dragged down by resource stocks. BHP Billiton and Rio Tinto were lower after iron ore prices fell below US$50 a ton. Fortescue Metals Group slumped despite the company beating its full year iron ore export guidance. Newcrest Mining advanced after the gold miner posted a 10% lift in gold production for the June quarter. The Kospi was virtually unchanged (up 0.34 point). GDP grew just 0.3% in the second quarter, with consumption battered by an outbreak of Middle East Respiratory Syndrome and the worst drought in a century. The Sensex retreated 0.5%.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Flash July composite PMIs will be released for the Eurozone, Germany and France. Flash manufacturing PMIs will be released for China, Japan and the US. June US new home sales will be posted.
*Note — all releases are listed in local time.