US FINANCIAL MARKET
U.S. Stocks Little Changed at the Open as Confidence Data Improves
- DuPont fell 4 percent after the maker of Pioneer genetically-modified corn trimmed its full-year earnings forecast as farmers switched to soybeans.
- Nike added 2.2 percent after the largest sporting-goods maker posted fourth-quarter profit that beat analysts’ estimates.
- Stocks retreated yesterday as James Bullard, president of the Federal Reserve Bank of St. Louis, suggested that higher interest rates may occur in the first quarter of next year.
- The Thomson Reuters/University of Michigan’s final June index of consumer sentiment rose to 82.5 from 81.9 a month earlier.
- The S&P 500 trades at 16.6 times the projected earnings of its members, close to its highest valuation in four years.
DuPont Cuts Profit Forecast on Disappointing Seed Sales
- Second-quarter operating profit will be “moderately” less than a year earlier, the Wilmington, the company said yesterday in a statement.
- Operating earnings in 2014 are predicted to be $4.00 to $4.10 a share, less than its previous projection of $4.20 to $4.45.
- Some farmers have switched to soybeans this year after the price of corn slumped from a record in 2013, leading DuPont to take more writedowns on seed inventories than it expected.
- DuPont said better-than-expected North American soybean sales volumes won’t offset the drop in corn.
- Monsanto, the world’s largest seed producer, also said this week that its corn profit was lower in its most recent fiscal quarter.
Nike Profit Tops Estimates as North American Sales Gain
- Net income rose 5.4 percent to $698 million from $662 million a year ago.
- Total sales rose 11 percent to $7.43 billion. Analysts projected $7.34 billion, on average.
Big-Belly Boeing 777 Blunts Demand for Cargo-Only Jets
- Sales of Boeing’s 777 and 747-8 cargo aircraft have stalled as carriers such as British Airways and FedEx, operator of the world’s largest cargo airline, shift less-urgent shipments to the cargo holds of Boeing 777 jetliners.
- Boeing’s largest twin-engine model is leading the influx of aircraft with spacious cargo bays that are squeezing out older freighters and damping demand for new planes.
- Boeing has sold five dedicated freighters this year, four of the 777F variant and one based on the 747-8 jumbo. The 777F is its current top-selling freighter, at 134.
German government cancels Verizon contract in wake of U.S. spying row
- Reports based on disclosures by former U.S. intelligence contractor Edward Snowden alleged Washington had conducted mass surveillance in Germany.
- Verizon has been providing network infrastructure for the German government’s Berlin-Bonn network, used for communication between ministries, since 2010.
- The government said Deutsche Telekom would replace services provided by Verizon.
Alibaba picks New York Stock Exchange for U.S. IPO
- Chinese e-commerce company Alibaba Group has decided to list on the New York Stock Exchange, a blow to the rival Nasdaq bourse.
- Alibaba, which handles more than 80 percent of online retail transactions in China, will list under the symbol “BABA“.
- Alibaba would be the largest Chinese company to list on U.S. exchanges by far, with an estimated valuation north of $200 billion.
US ECONOMY & POLITICS
Consumer Sentiment in U.S. Rose in June from Month Earlier
- The Thomson Reuters/University of Michigan’s final sentiment index climbed to 82.5 from 81.9 in May.
- Economists surveyed by Bloomberg projected an increase to 82 after a preliminary June reading of 81.2.
- Index of current conditions, which measures Americans’ views of their personal finances, increased to 96.6 this month from 94.5 in May. The preliminary reading was 95.4.
- The gauge of expectations six months from now was little changed at 73.5 after 73.7 the prior month.
EUROPE & WORLD
Emerging Markets Show Biggest Premium Since ’12 With ETFs
- With stocks rising from Sao Pauloto Moscow to Istanbul, asset managers have piled almost $11 billion into developing-nation ETFs listed in the U.S. this quarter, the most since 2012.
World Bank Says Emerging-Market Calm May Turn to Volatility
- “Current market conditions are supportive to developing-country prospects in the short term, but could encourage investors to underprice risk and borrowers to increase leverage,” the Washington-based lender said in a report today. “This might set the ground for sudden spikes in volatility and sharp adjustments to adverse news.”
Japan Prices Rise Most Since ’82 on Tax and Utility Fees
- Consumer prices excluding fresh food rose 3.4 percent in May from a year earlier.
- Overall inflation was 3.7 percent, while the gauge excluding perishables and energy was 2.2 percent. Electricity charges rose 11.4 percent on year and gasoline gained 9.6 percent, while fresh seafood prices jumped 14.3 percent.
- Price gains will probably slow in coming months before accelerating again toward the Bank of Japan’s 2 percent target.
- The yen’s 18 percent decline against the dollar in 2013 raised prices of imported energy and other goods.
Japan jobless rate hits 16-year low, signals spending rebound ahead
- The jobless rate in the world’s third-largest economy fell to 3.5 percent, the lowest since 1997.
- At the same time, the availability of jobs rose to its highest level since 1992.
Mercedes Teams With Infiniti on $1.4 Billion Mexico Plant
- The German and Japanese automakers will assemble as many as 300,000 Mercedes-Benz and Infiniti compact cars at a facility near Nissan’s plant in Aguascalientes. The first cars are due to roll off the line in 2017.
- The new Mercedes-Infiniti factory will be adjacent to Nissan’s $2 billion plant in Aguascalientes, which opened in November.
TODAY in HISTORY
- Joshua Slocum became the first person to successfully circumnavigate the earth alone when he landed his sloop Spray in Newport, R.I., a 46,000-mile trip (1898)
- President Harry S. Truman ordered the Air Force and Navy into the Korean War (1950)
- The world’s first atomic power station opened at Obninsk, near Moscow (1954)
- The legendary Route 66, running from Chicago to Santa Monica, Calif., was decertified, the victim of the Interstate Highway System (1995)
- The national do-not-call registry, formed to combat unwanted telemarketing calls and administered by the Federal Trade Commission, enrolled almost three-quarters of a million phone numbers on its first day (2003)
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