World stock markets rise as bond yields buoy financials

NEW YORK -- A broad index of stocks around the world rose on Thursday as financial shares helped Wall Street's benchmark index advance, while oil prices fell on a forecast for weaker demand.

The US benchmark S&P 500 stock index notched a record closing high just shy of the 3,000 mark as financial shares were boosted by a jump in bond yields following soft demand in an auction of $16 billion in 30-year Treasuries.

A fall in biotech and pharmaceutical shares pulled down the Nasdaq, however, as the administration of US President Donald Trump withdrew a rule that would have required health insurers to pass on rebates from drugmakers.

But the withdrawal of the rule benefited shares of insurers, including UnitedHealth Group Inc, which boosted the Dow Jones Industrial Average above the 27,000 mark for the first time.

MSCI's gauge of global stocks gained 0.24 percent as US stocks mostly moved higher.

"Financial stocks are fine today as we're getting ready to enter the earnings season for banking," said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. "The 30-year Treasury auction is steepening the (yield) curve a bit."

"The pharma space is having a bad day," he added. "The market would be quite a bit higher if it weren't for that."

Oil prices retreated from early gains after the Organization of the Petroleum Exporting Countries forecast less demand for its crude next year. Earlier in the session, they had hit their highest levels in more than a month.

US crude futures settled 23 cents lower, or 0.38 percent, at $60.20 a barrel. Brent crude futures settled down 49 cents, or 0.73 percent, at $66.52 a barrel.

On Wall Street, the Dow Jones Industrial Average rose 227.88 points, or 0.85 percent, to 27,088.08, the S&P 500 gained 6.84 points, or 0.23 percent, to 2,999.91 and the Nasdaq Composite dropped 6.49 points, or 0.08 percent, to 8,196.04.

US shares had previously hit record highs after Federal Reserve Chairman Jerome Powell confirmed the US central bank stood ready to "act as appropriate" in response to risks to the US economy, including disappointing factory activity, tame inflation and a simmering trade war with China.

Powell spoke before the Senate Banking Committee on Thursday following similar testimony before the House of Representatives Financial Services Committee on Wednesday.

"The Fed news is baked into the market now. The next big news is earnings," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

US corporate earnings season begins in earnest next week, with large banks such as Citigroup Inc and JPMorgan Chase & Co reporting results.

In fixed-income markets, benchmark 10-year US Treasury notes last fell 22/32 in price to yield 2.1361 percent, from 2.061 percent late on Wednesday.

Data showing the biggest gain in US underlying consumer prices in 1-1/2 years also contributed to gains in Treasury yields. The data did not change expectations for a rate cut from the Fed, however.

The dollar index, which measures the greenback against a basket of six major currencies, dipped slightly amid prospects for a Fed rate cut, though the strong US inflation data capped its losses. It was last down 0.04 percent.

The Japanese yen and the euro were near flat against the dollar.

Spot gold fell 0.9 percent to $1,406.04 an ounce on stronger-than-expected US inflation data.

source: news.abs-cbn.com

Wall Street starts year on strong note; Nasdaq ends above 7,000

NEW YORK - US stocks rose in the first session of the new year and the Nasdaq closed above 7,000 for the first time on Tuesday as investors were optimistic that 2018 will bring more gains for the market.

The Nasdaq, driven by gains in Apple, Facebook, Amazon and Alphabet, breached 6,000 in April of last year and closed above 5,000 in 2015 for the first time in 15 years. The technology index added 1.4 percent on Tuesday, following a 37-percent surge in 2017 that made it the best-performing S&P 500 sector.

The S&P 500 also hit a record high close. Besides technology, S&P consumer discretionary, healthcare, energy and materials indexes all were up more than 1 percent on the day.

Major stock indexes closed out 2017 with their best performances since 2013. Many investors say the rally could continue this year with help from the recently approved US tax overhaul that is anticipated to boost profits as well as the economy.

"We're off to the races once again," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

"I don't expect the kind of moves we saw last year. But as long as monetary policy stays the way it is ... my view is stocks are going to have a decent year. And fiscal policy has become stimulative, as well, given the tax bill."

The Dow Jones Industrial Average rose 104.79 points, or 0.42 percent, to 24,824.01, the S&P 500 gained 22.18 points, or 0.83 percent, to 2,695.79 and the Nasdaq Composite added 103.51 points, or 1.5 percent, to 7,006.90.

"Our best guess is the first quarter or half of the year can be OK as a continuation of last year," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

But, he said, "valuations are still stretched, interest rates are still rising, and those will provide headwinds to the market at some point."

The S&P consumer discretionary index was up 1.5 percent, helped by a gain in Amazon of 1.7 percent.

J.C. Penney, Nordstrom and Kohl's climbed after a bullish Citigroup note on the retail sector detailed benefits from the corporate tax cuts.

Energy shares were up even though oil prices dipped. Oil hovered near mid-2015 highs amid large anti-government rallies in major exporter Iran and ongoing supply cuts led by OPEC and Russia. The S&P energy index rose 1.8 percent.

Shares of casino operators Wynn Resorts and Melco Resorts & Entertainment were down after a report showed a lower-than-expected rise in Macau gambling revenue in December.

Abbott Labs jumped 3 percent and hit an intraday record of $59.20 after two brokerages upgraded the company's stock to "overweight."

Shares of insurer Allstate were down 2.7 percent following a brokerage downgrade.

Advancing issues outnumbered declining ones on the NYSE by a 1.64-to-1 ratio; on Nasdaq, a 2.01-to-1 ratio favored advancers.

About 6.7 billion shares changed hands on US exchanges. That compares with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

source: news.abs-cbn.com

Netflix subscriptions boom around world, shares jump 20 pct

LOS ANGELES - Netflix Inc. added over 50 percent more subscribers than expected in the third quarter as original shows such as "Stranger Things" drew new international viewers and kept U.S. customers despite a price hike, sending its shares soaring 20 percent in late trade.

The company broke a two-quarter trend of disappointing subscription growth. Netflix, which has spent heavily to expand outside its home market, also said that it was on track to start harvesting "material global profits" next year, even as it raised spending on original programming.

Shares of Netflix rose to $119.82 in extended trade from a close of $99.80.

Netflix added about 3.20 million subscribers internationally in the third quarter, higher than the 2.01 million average analyst estimate.

In the United States, Netflix added 370,000 subscriptions, compared with analysts' estimate of 309,000, according to research firm FactSet StreetAccount.

"Investors appear laser focused on subscriber growth, and so long as Netflix delivers on that metric, investors will bid its shares up," said Wedbush Securities analyst Michael Pachter. However, Pachter said he thought the continuing cost of developing new shows would undermine plans to deliver material profits in 2017.

Netflix has expanded into more than 130 markets worldwide, including most major countries, except China. It said on Monday it was dropping plans to launch a service in China in the near term, opting instead to license its shows for "modest" revenue,

The company said it still hopes to launch service in China "eventually."

In the meantime, Netflix plans to keep pouring money into building its stable of original and licensed TV shows and movies. Content spending will rise to $6 billion next year, a $1 billion increase from 2016, the company said."We will keep investing in growing the content spend, even domestically, for quite a long time," Chief Executive Reed Hastings said on webcast.

Netflix has been facing a slowdown in subscription growth in the United States as the market matures and a planned U.S. price hike raised concerns it would not hit its targets. It also faces competition from the likes of Hulu and Amazon.com Inc.

But the company, whose other popular original shows include "Orange is the New Black" and "House of Cards", said it expects to add 1.45 million subscribers in the United States in the current quarter.

Analysts on average were expecting 1.27 million additions, according to research firm FactSet StreetAccount.

"Netflix has successfully navigated the challenges of a price increase," retail research group Conlumino said in a note, adding that it had been "somewhat less successful" in maintaining subscriber growth.

In its international markets, it expects subscriber additions of 3.75 million, compared with the average analyst estimate of 3.32 million.

Third-quarter revenue rose 31.7 percent to $2.29 billion.

Netflix's shares have surged in the past few years, driven by rapid growth as the company redefined television and fueled "binge watching."

The stock, however, was down 12.7 percent this year as investors fretted about slowing growth in its domestic market and increasing competition.

source: www.abs-cbnnews.com

Wall Street closes down as Nike's gains stand out

NEW YORK -- Wall Street stocks ended the day in negative territory on Friday, putting the major indices down for the week as oil stocks joined Wal-Mart Stores in retreating from recent gains.

But sports footwear and apparel giant Nike Inc saw shares up 3 percent, making it one of the Dow's biggest gainers.

The Dow Jones Industrial Average closed down 0.2 percent at 18,552.57.

The broader S&P 500 was down 0.1 percent at 2,183.87 and the tech-heavy Nasdaq was essentially flat at 5,238.38.

"The market continues to exhibit sideways price action but it is still an upside bias. The market just can't just sell off with any bad news," Michael James of Wedbush Securities told AFP.

"None of the economic data was really market moving, nor were the Fed comments from the last meeting. They had no impact," he added.

Oil stocks were in negative territory on the Dow, with supermajor Exxon Mobil Corp down 1.3 percent and Chevron 1.2 percent.

Wal-Mart shares gave up all of Thursday's gain which came after the retailer posted better-than-expected earnings, despite absorbing costs from its recent acquisition of the online retailer Jet.com.

On Friday the company closed down 2 percent at $72.81.

Nike surged after announcing it had formed a supply-chain partnership with private equity firm Apollo Global Management LLC. The deal could help the retailer surmount logistics problems.

source: www.abs-cbnnews.com

Facebook revenue smashes expectations as mobile ad sales surge

Facebook Inc.'s quarterly revenue rose more than 50 percent, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending.

The company's shares rose 9.5 percent in after-hours trading on Wednesday to $118.39, setting it on track to open at a new high on Thursday, at nearly triple its initial public offering four years ago.

Facebook also announced it would create a new class of non-voting shares in a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media juggernaut he founded.

The company plans to create a new class of non-voting shares, which would be given as a dividend to existing shareholders. That would allow Zuckerberg, who wants to give away 99 percent of his wealth, to sell non-voting stock to fund philanthropy and keep the voting stock that assures his control.

Alphabet Inc. passed a similar proposal in 2014 that ensured its founders' control by creating new non-voting shares.

Some 1.65 billion people used Facebook monthly as of March 31, up from 1.44 billion a year earlier. Zuckerberg said users were spending more than 50 minutes per day on Facebook, Instagram and Messenger, a huge amount of time given the millions of apps available to users.

Advertisers are shifting money from television to web and mobile platforms, and Facebook is one of the biggest beneficiaries. It faces fierce competition in the mobile video market, where rivals Snapchat and YouTube also garner billions of video views every day.

Facebook recently expanded its live video product, rolling out several new features and making it more prominent on the app to encourage users to create videos and share them. The quarterly results showed success attracting advertisers with the move, and the company was able to expand its operating profit margin to 55 percent from 52 percent a year earlier.

"The company consistently 'warns' about higher spending, but they consistently manage their spending to deliver earnings upside. They're an impressive company, and they leave very little room for criticism," said Wedbush Securities analyst Michael Pachter, who called the operating margin a good surprise.

Facebook did not offer details on sales of its Oculus Rift virtual reality headset, but emphasized that the device was in its early days and said that sales would not significantly impact 2016 revenue.

The results come after disappointments for investors from several major Silicon Valley firms.

"After Intel and IBM last week, and then Twitter and Apple yesterday, this is by far the best number I’ve seen in technology," said Daniel Morgan, senior portfolio manager at Synovus Trust Company which owns about $40 million worth of Facebook shares, commenting specifically about Facebook ad revenue.

Facebook has not begun advertising on some of its most popular apps. "They haven't yet turned on the monetization spigot for Messenger or WhatsApp, so there should be significant headroom still," said Jan Dawson, chief analyst at Jackdaw Research.

The company's net income attributable to common shareholders nearly tripled to $1.51 billion, or 52 cents per share, in the first quarter from $509 million, or 18 cents per share, a year earlier.

Excluding items, the company earned 77 cents per share, beating Wall Street's 62-cent consensus.

Total revenue rose to $5.38 billion from $3.54 billion, with ad revenue increasing 56.8 percent to $5.20 billion. Mobile ad revenue accounted for about 82 percent of total ad revenue, compared with about 73 percent a year earlier.

Analysts on average had expected revenue of $5.26 billion.

If the stock proposal is approved - and Zuckerberg has a majority of voting stock - the company will effectively carry out a 3-for-1 stock split, issuing two shares of non-voting Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock.

Zuckerberg and his wife, Priscilla Chan, announced last year that they would give away 99 percent of their Facebook shares to fund charitable endeavors.

Investors said they were not concerned that Zuckerberg would have increasing control, pointing to the company's consistent ability to grow and exceed expectations.

"I honestly don't think anyone cares if he has more power, since he's done everything right since they went public," said Pachter.

source: www.abs-cbnnews.com