Stock Market News for February 12, 2015 – Zacks Investment …
Benchmarks ended Wednesday’s choppy session almost unchanged as uncertainty regarding bailout negotiations between Greece and its creditors dented investor sentiment. Moreover, renewed worries about the Russia-Ukraine crisis also dampened investor sentiment. Meanwhile, another decline in oil prices following rise in crude inventories dragged down energy shares. However, encouraging earnings results including those from Pepsico and Mondelez limited losses yesterday.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) declined a meager 0.04% to close at 17,862.14. The Standard & Poor 500 (S&P 500) ended flat 2,068.53. However, the tech-laden Nasdaq Composite Index closed at 4,801.18; increasing 0.3%. The fear-gauge CBOE Volatility Index (VIX) declined 1.6% to settle at 16.96. A total of about 6.4 billion shares were traded on Wednesday, below last five sessions’ average of 7 billion. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.
On Wednesday, Greek Finance Minister Yanis Varoufakis entered into a meeting with the Eurozone’s finance ministers to discuss the conditions of the bailout program. On Tuesday, the new government won a confidence vote in the parliament that ruled out extension of the international bailout. It is being speculated that if Greece and its creditors fail to find any solution to the debt crisis, then “Grexit” would be a direct outcome. Investor’s remained focused on the outcome of the meeting.
Benchmarks were boosted on Tuesday following rumors that the European Commission may consider extending the deadline of Greece’s bailout program by another six months. However, Wolfgang Schaeuble, German Finance Minister, denied these rumors and dismissed any possibility of a potential breakthrough on debt negotiations. The current bailout program will expire on Feb 28. Meanwhile, there are indications that Greece may ask Eurozone’s officials to waive 30% of reforms entailed by the bailout in the meeting at Brussels.
Meanwhile, leaders of Germany and France took the initiative to ease the Russia-Ukraine crisis on Wednesday. Germany’s Chancellor Angela Merkel and French President Francois Hollande arranged a meeting between Ukraine’s President Petro Poroshenko and Russia’s President Vladimir Putin at Belarus in order to settle this lingering crisis. However, it was reported that pro-Russian separatists murdered 19 Ukrainian soldiers in Debaltseve, one of the most important strategic locations in Ukraine. Moreover, 17 people were killed by a rocket attack in a government controlled area.
In domestic news, the U.S. Energy Information Administration (EIA) reported that U.S. crude oil inventories increased 4.9 million barrels for the week ending Feb 06 to 417.9 million barrels. This is the highest level of inventories that have piled up in more than 80 years. Rise in crude inventories dragged down oil prices on Wednesday. The prices of WTI crude oil and Brent crude oil declined 2.4% and 3.2% to $48.84 per barrel and $54.66 a barrel, respectively. The Energy Select Sector SPDR (XLE) lost 0.7% following the slump in oil prices. Key energy stocks including EOG Resources, Inc. (EOG – Analyst Report), Marathon Petroleum Corporation (MPC – Analyst Report), Halliburton Company (HAL – Analyst Report) and Baker Hughes Incorporated (BHI – Analyst Report) declined 2.2%, 1.2%, 1.1% and 0.8%, respectively.
Separately, shares of Pepsico, Inc. (PEP – Analyst Report) gained 2.5% after announcing fourth quarter earnings per share of $1.12, beating the Zacks Consensus Estimate of $1.08. Moreover, the food/beverage giant witnessed a year-on-year increase of 6% in fourth quarter earnings per share. The fiscal 2014 adjusted earnings per share of $4.63 also came ahead of the Zacks Consensus Estimate of $4.59. Also, Mondelez International, Inc.’s (MDLZ – Analyst Report) shares rose 2.6% after posting fourth-quarter adjusted earnings of 47 cents per share, higher than the Zacks Consensus Estimate of 43 cents. Mondelez’s full-year adjusted earnings of $1.76 per share also beat the Zacks Consensus Estimate of $1.73.
Upbeat earnings results from Pepsico and Mondelez boosted the Consumer Staples Select Sector SPDR (XLP) on Wednesday. The sector gained 0.5% and was the biggest gainer among the S&P 500 sectors. Key stocks from the sector including Reynolds American Inc. (RAI – Analyst Report), Keurig Green Mountain, Inc. (GMCR – Analyst Report), Dr Pepper Snapple Group, Inc. (DPS – Analyst Report) and Altria Group Inc. (MO – Analyst Report) gained 2.2%, 1.3%, 0.9% and 1.8%, respectively.
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Stock Market News for February 12, 2015 – Zacks Investment …
