On 21 October, 2015 – Global stock indices were mixed

Stocks were mixed globally thanks to the continued flow of earnings reports and caution prior to the ECB meeting Thursday.
United States
US stocks retreated in afternoon trading Wednesday, giving up modest gains made earlier in the day. Investors were evaluating the latest company earnings and deal news. The Dow Jones industrials were down 0.3%, the S&P declined 0.6% and the Nasdaq lost 0.8%.
Several big companies including General Motors and Boeing delivered better earnings than were expected. Ferrari soared in its market debut. General Motors stock was up after the automaker delivered better than expected earnings and revenue for the third quarter. Strong North American sales helped GM overcome US$1.5 billion in costs from its ignition switch recall. Chipotle Mexican Grill tumbled after the company’s quarterly results fell short of expectations. Shares of semiconductor company KLA-Tencor soared on news that it is being acquired by Lam Research for about US$10.6 billion. Shares in Lam Research also gained. Valeant Pharmaceuticals International took health care stocks on a wild ride after Citron Research questioned whether Valeant is a ‘pharmaceutical Enron’. The company’s shares plunged, only to then rebound after the company disputed the report and CNBC said investor Bill Ackman added 2 million shares to his stake in the company. Boeing advanced after it raised its 2015 guidance after the company reported that its third quarter earnings rose 25% on continued growth in deliveries of commercial jetliners.
Western Digital said it would buy memory chip maker SanDisk for about US$19 billion. The cash and stock offer values SanDisk at US$86.50 per share, or a total equity value of about US$19 billion, using a five day volume weighted average price ending on October 20 of US$79.60 per share of Western Digital stock. Coco-Cola’s profit and revenue fell in the third quarter as the company booked one time charges related to its cost cutting push and it also took a hit from the strong dollar. Global sales volume rose 3%, with non-carbonated drinks up 6% and carbonated drinks up 2%. For the quarter ended October 2, Coca-Cola earned US$1.45 billion, or 33 US cents per share. Not including one-time items, Coke earned 51 US cents per share. Total revenue was US$11.43 billion.
American Express reported a 15.8 percent decline in quarterly profit due to higher expenses and a strong dollar. The company’s net income attributable to common shareholders fell to US$1.23 billion or US$1.24 per share in the third quarter ended September 30 from US$1.47 billion or US$1.40 per share a year earlier. eBay reported a 2.4 percent fall in revenue in its first quarterly results since the spinoff of its PayPal payments business. eBay’s net revenue fell to US$2.1 billion in the third quarter ended September 30 from US$2.15 billion in the same quarter last year. Net income fell to US$539 million or 45 US cents per share from US$673 million or 54 US cents per share a year earlier. PayPal, formerly eBay’s main growth engine, became a separate company on July 18.
Gold at the afternoon London fixing dropped US$10.65 to US$1,167.10. Copper futures were down 0.3% to US$2.36. WTI spot crude was down US$1.05 to US$45.24. Dated Brent spot crude was down 80 US cents to US$47.91. The US dollar was up against the pound, Swiss franc and the Canadian and Australian dollars. It was virtually unchanged against the euro and yen. The Dollar Index was up 0.2%. The yield on US Treasury 30 year bond was down 5 basis points to 2.87% while the yield on the 10 year note was down 4 basis points to 2.03%.
Europe
Stocks were mixed Wednesday. Corporate financial reports were in focus both in Europe and in the United States on a light session for economic data. Investors were also cautious ahead of the ECB announcement Thursday. The FTSE edged up 0.1%, the CAC gained 0.5% and the DAX increased 0.9%. However, the SMI was 0.6% lower.
The People’s Bank of China and the Bank of England announced on Wednesday that they signed an agreement to renew the existing reciprocal sterling/renminbi currency swap line for a further three years. The maximum value of the swap line was increased to RMB 350 billion from RMB 200 billion, when the original 3-year swap was agreed in June 2013.
SAP climbed after it announced that it has exceeded 1,300 customers for the SAP Business Suite 4 SAP HANA since the launch in February 2015. Volkswagen finished higher after reportedly suspending its top quality-control executive amid the widening emissions scandal. Daimler, BMW, Renault and Peugeot advanced. In London, Pearson plunged after the education publisher cut its profit guidance for 2015 and warned of challenging market conditions. Home Retail Group dropped after it warned of a weaker than expected full year profit.
BHP Billiton gained after the company posted solid production growth in the first quarter and said it remains on track to meet full-year production and cost guidance. ARM Holdings surged after its earnings per share rose. Sky climbed after it reported higher operating profit in its first quarter with increased revenues on constant exchanges rates. Reckitt Benckiser Group increased after the company reported net revenue of £2.195 billion for its third quarter and raised its full year revenue growth target. Credit Suisse Group dropped in Zurich. The banking giant has unveiled plans to raise roughly 6 billion Swiss francs (US$6.3 billion) in new capital after reporting a 24% decline in its third quarter profit. Shares of Nordea Bank dropped in Stockholm after the lender reported third quarter earnings below forecasts.
Asia Pacific
Stocks in this region were also mixed Wednesday. Gains were capped somewhat ahead of a European Central Bank meeting Thursday when ECB President Mario Draghi may drop hints of a potential expansion of quantitative easing to stave off deflation. While Japanese shares led the region’s gains on stimulus bets, Chinese shares succumbed to late day selling.
The Shanghai Composite tumbled 3.1%, its biggest loss in five weeks as investors booked profits across the board after recent gains. Outstanding margin loans have been expanding over the past few days on expectations that Beijing will unveil more fiscal and monetary stimulus to boost growth and tackle deflationary pressures in the economy. Hong Kong financial markets were closed for the Chung Yeung Festival.
The Nikkei added 1.9% as sluggish exports data bolstered stimulus hopes. The yen remained under selling pressure, crossing into the 120 range as weak data fanned speculation that the Bank of Japan will undertake further easing at its policy meeting on October 30. Japanese exports rose 0.6% on the year in September after August’s 3.1% gain. Imports fell an annual 11.1%, producing a trade deficit of ¥114.5 billion. Canon, Mazda Motor, Honda Motor and Panasonic advanced. Sony gained after Sony Pictures Entertainment agreed to pay up as much as US$8 million to resolve a lawsuit by employees over the theft of their personal information in a computer hack linked to the studio’s release of the movie “The Interview.”
The S&P/ASX and All Ordinaries were up 0.2% and 0.3% respectively. BHP Billiton gained after releasing a pleasing quarterly production report. Rio Tinto and Fortescue Metals Group also advanced. Newcrest and Evolution were up after gold extended gains to a second consecutive session. Banks ended narrowly mixed.
The Kospi edged up 0.2% on optimism corporate profitability will improve in the coming quarters. The Sensex was down 0.1%, reversing early gains as a sudden selloff in Chinese shares spurred a bout of risk aversion.
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*
Japan posts September merchandise trade balance. The Bank of Canada announces its monetary policy decision and publishes its Monetary Policy Report.
*Note — all releases are listed in local time.