Dow Jones closes softer after economy concerns; Microsoft and Anadarko Petroleum in focus
Monday, 30 April 2012
U.S. equity markets fell overnight after a soft reading on business activity in the Chicago area sparked concern about the economy.
Dow Jones closes 15 points lower at 13,214, while the NASDAQ eased 23 points to 3046.
In Europe official data confirmed Spain is back in its second recession in three years as its economy shrank by 0.3 percent in the first quarter, following a similar decline in the previous quarter.
Last week S&P downgraded the country's credit rating from "A" to "BBB+" citing a struggling banking sector that could require further government support. The move means Spanish debt is now ranked only three steps above junk bond status. The unemployment rate in the country rose to 24.4% in the first quarter.
In corporate news, Microsoft (NASDAQ:MSFT) Monday revealed plans to invest $300 million in Barnes & Noble's (NYSE:BKS) Nook e-reader and college text businesses. Monday morning, shares of the bookseller soared more than 60 percent to $22.60.
The surprise alliance aims to capitalize on the transformation in the publishing world in favor of rapidly-growing digital text.
After the closing bell, Anadarko Petroleum (NYSE:APC) is seen posting first-quarter earnings of 83 cents per share on revenue of $3.4 billion.
Health insurer Humana's (NYSE:HUM) first-quarter earnings fell 21% due to costs to support growing membership, legal spending requirements and a smaller benefit from medical-claims reserves.
For the three months ended March 31, Humana reported a first-quarter profit of $248 million, or $1.49 per share, down from $315 million, or $1.86 per share, a year earlier. Analysts polled by Thomson Reuters had expected earnings of $1.53 per share for the first quarter.
NYSE Euronext (NYSE:NYX) said Monday that its profits fell by almost a third in the first quarter due to a difficult trading environment and costs from its failed merger with Deutsche Boerse.
For the three months that ended March 31, net profit was $87 million compared with $155 million a year earlier, while revenue slipped to $601 million from $679 million, hurt in part by of lower trading volume in derivatives.
On the economic front, US spending by consumers slowed more than expected in March, despite income rising at a faster-than-anticipated rate.
A Commerce Department report showed that personal spending increased 0.3% in the month, down from the 0.9% rise in spending the month previously. Analysts expected a 0.5% gain in spending, according to Briefing.com.
Adjusting for higher prices in the month, spending increased only 0.1%.
Income increased 0.4%, up from the 0.2% gain the previous month.
In addition, the Chicago Purchasing Managers' Index for April fell to 56.2, down sharply from 62.2 in March, and below expectations for 60. Any figure over 50 indicates expansion.
Friday sees the release of the monthly jobs report for April. Economists are expecting that 162,000 jobs were added in April. This compares to gains of more than 200,000 seen in December, January and February.
On the NYMEX, oil for June delivery fell 61 cents to $104.32 a barrel while gold futures for June delivery fell $7.60 to $1,658.40
European stocks finished mixed with the FTSE 100 rose slightly while the DAX shed 0.5% and the CAC 40 dropped 1.5%.