RTTNews - The major markets across Europe are poised to open weaker on Wednesday, mirroring the cues from Wall Street, where the major indices ended in negative territory amid volatile trading Hewlett Packard's earnings released after the market closed in the U.S might also influence trading in Europe. Some degree of profit taking cannot be ruled out following four straight sessions of advances.
Wall Street stocks closed mixed on Tuesday amid volatility in reaction to mixed news. The U.S. Commerce Department revealed that housing starts in April declined to an annual rate of 458,000 units in April, compared to March's revised rate of 525,000 units. Economists had forecast the figure to rise to a pace of 540,000 units from the rate of 510,000 units originally reported for March. The report also showed that building permits were also down, slipping by 3.3% to an annual rate of 494,000 units. Home Depot (HD) reported first quarter results that beat Wall Street estimates.
The Dow closed lower by 29.23 points or 0.34% at 8475, while the S&P 500 closed down by 1.58 points at 908.13. On the other hand, technology-weighted Nasdaq was able to hold on to thin gains, finishing up by 2.18 points or 0.13% at 1735, ahead of the results from Hewlett Packard.
Dow component Hewlett Packard (HPQ) reported second quarter results shortly after the closing bell. The firm posted a net income of $1.7 billion or $0.70 per share, compared to $2.1 billion or $0.80 per share in the prior year period. Adjusted earnings for the quarter were $2.1 billion or $0.86 per share, compared to $2.2 billion or $0.87 per share in last year quarter.
Markets across the Asia-Pacific region are trading in positive territory, discounting the weak GDP numbers from Japan, as traders focused on the higher oil prices and a positive outlook accorded to the transportation sector by Goldman Sachs.
The markets in Europe rose for the fourth day on Tuesday, as banking stocks rallied on optimism of a recovery in the sector and mining stocks gained on firmer metals prices. Cost of borrowing between banks fell further. The London interbank offered rate, or Libor, for three- month loans in dollars dropped four basis points to 75 basis points today, the biggest two-day decline in more than four months, the British Bankers' Association said.
The FTSEurofirst 300 index of pan-European blue chips closed 1.42% higher at 872.09 points, while the narrower DJ Stoxx 50 index rose 1.21% to 2,132.80 points. The U.K.'s FTSE 100 index rose 0.81% to 4,482, while France's CAC 40 index surged up 0.91% to 3,275 and Germany's DAX index climbed 2.22% to 4,960.
On the economic front, the minutes of the Bank of England's monetary policy meeting held on May 6 and 7 is due. At the meeting, the central bank had retained its key interest rate at a historical low of 0.5% and raised the size of the asset purchase scheme by GBP 50 billion to GBP 125 billion. Elsewhere in Europe, a final report for Spanish first quarter GDP is due at 3.00am ET. According to flash estimate, the economy had contracted 1.8% sequentially in the first quarter of 2009, following a 1% decline in the fourth quarter.
Meanwhile, a report released by the German Statistical Office, Destatis, earlier in the day revealed that the index of producer prices for industrial products (domestic sales) for Germany fell by 2.7% in April 2009 from the corresponding month of the preceding year. Compared with the preceding month, the index fell by 1.4% in April 2009. Producer prices were forecast to fall 1.3% annually in April. On a monthly basis, producer prices are expected to stay flat.
On the corporate front, automobile stocks might witness action after Volkswagen and Porsche, in a joint statement, reiterated their commitment to integrate the two companies. Fiat SpA revealed that it is planning to submit an offer to purchase the Opel Unit from General Motors later in the day.
Experian plc (EXPN.L) revealed that profit for the year attributable to equity shareholders of parent company for the year ended 31 March 2009 was US$486 million or 47.5 cents per share, compared to US$437 million or 42.7 cents per share a year ago. Profit before tax rose to US$578 million from US$521 million in the previous year. Revenue for the year was US$3.87 billion, up from US$3.79 billion in the prior year.
London Stock Exchange Group plc (LSE.L) reported a loss for the year ended March 31 2009 compared to profit last year. Loss for the year attributable to equity shareholders of parent was £338 million or 126.1 pence per share compared to a profit of £168.3 million or 69.7 pence per share a year ago. Revenue for the year was £671.4 million, up from £546.4 million in the prior year.
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