Report from Europe: Market Lower as JP Morgan Dissappoints
The Mole submits: US stocks advanced for a second day Thursday as technology shares climbed before Intel (INTC) reported earnings and business inventories increased more than forecast, overshadowing an unexpected drop in retail sales. Intel added 2.5%. Oracle (ORCL) rose to an almost nine-year high as Morgan Stanley predicted a stock rally as the acquisition of Sun Microsystems (JAVA) boosts earnings. Marriott International hotel group surged 5.6% after projecting higher revenue. Also health-care stocks rose after Democrats reached an agreement with unions over taxing high-end health plans. As far as the US news flow was concerned, President Obama announced that financial companies with assets over $50 billion would be subject to a levy from 30 June that the administration estimates will raise $90 billion over the next 10 years and $117 billion over the next 12 years. Yet financials again rallied overnight. So either investors think that financial companies will find creative solutions to minimise their liabilities or that these companies will successfully pass on all the additional costs to their customers and employees. On first read, US retail sales did post an unexpected decline in December, but only after some hefty revisions to November. Not that means that the level of sales in December was about what the market had been expecting. I also noted a further decline in the ratio of business inventories to sales in November. This ratio is now almost back to trend. Production levels are simply too low given the prevailing level of demand, which bodes well for output and employment this year. On that score, whilst initial jobless claims rose a touch last week, they remain well below pre-Xmas levelsComplete Story »
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