Mixed results on Wall Street: Morning market insights

The New York Stock Exchange was mixed overnight, with the Standard & Poor’s 500 Index flat after its biggest weekly loss last week, the Dow up and the NASDAQ down.

Better-than-expected US retail data buoyed the market.  Retail sales rose 0.8% in March, following a 1% gain in February. Eleven of 13 retail categories showed increases, including electronics, clothing and furniture.

“The US economic recovery looks intact,” Eric Teal, a North Carolina-based investment officer, told Bloomberg. “Earnings will continue to grind higher. That explains the market resilience.”

The S&P500 Index was flat, finishing down 0.05% to 1369.57.

The Dow Jones Industrial Average was down 0.56% or 71.82 points to 12921.40.

The NASDAQ Index fell 0.76%, or 22.93 points, to 2988.40.

Profits were up in the first quarter as investors watched earnings reports. Profit per share at US S&P 500 companies rose 1.7% in the first quarter, according to  Bloomberg.

Procter & Gamble (PG:US) rose 1.47% overnight to $US66.78 after lifting its quarterly dividend from 52.5 centres a share to 56.2 cents.

DuPont (DD: US) was up 1.35% to $US52.72. The company has private equity firms bidding for its car paint business, according to Reuters.

West Texas Intermediate (WTI) oil was up slightly to $US102.93 a barrel.

Gold was down 0.63% to be trading at $US1649.70 an ounce.

The Australian dollar was up slightly, buying $US1.0356 at 8.15am AEST.

Europe

European stocks recovered from their biggest losses since August after activity raised investor interest.

Spanish Prime Minister Mariano Rajoy declared Spain must slash its budget deficit to access financing, as bond yields rose to highest levels since December.

“The fundamental objective at the moment is to reduce the deficit,” Rajoy said, according to Bloomberg. “If we don’t achieve this, the rest won’t matter: we won’t be able to fund our debt; we won’t be able to meet our commitments.

“No one can expect such deeply rooted issues to be resolved in a few weeks.”

The Spanish government forecasts its economy will shrink 1.7% this year as it implements the deepest budget cuts in more than three decades. The plan seeks to shrink the deficit to 5.3% of gross domestic product (GDP) this year from 8.5% last year.

Rajoy’s announcement on March 2 that he would miss a deficit target of 4.4% triggered falls in Spanish markets.

Rajoy, a conservative, has raised taxes, cut spending, loosened labour laws and asked banks to increase provisions against troubled the real estate sector as he tries to rein in the budget deficit. The Spanish property bubble burst during the GFC, causing much of the damage to the economy.

“We have done a lot in four months but we are still at the beginning of a long reformist path,” he said.

The London FTSE 100 closed up 0.26% to 5666.28.

The German DAX was up 0.63% or 41.29 points to 6625.19.

The European Stoxx50 index rose 0.42% to 2301.19.