While you were sleeping: Walt Disney leaps
Feb 7 (BusinessDesk) – Wall Street rallied as solid earnings reports including from Walt Disney and a
larger-than-expected drop in weekly jobless claims provided reassurance that the world’s largest economy is firing on
enough cylinders after all.
US jobless claims declined by 20,000 to 331,000 in the period ended February 1, according to Labor Department data. It
was positive news a day after the ADP data showed US private employers added a somewhat disappointing 175,000 jobs in
January, while December's gain in jobs was revised lower to 227,000, down from the initially reported 238,000.
"The underlying momentum in the labour market remains positive and it is very likely that this is the narrative that we
get from tomorrow's employment report," Millan Mulraine, deputy chief economist at TD Securities in New York, told
Reuters.
Friday’s Labor Department report is forecast to show nonfarm payrolls increased 184,000 in January, while the
unemployment rate held steady at 6.7 percent.
Even so, the extremely cold winter weather might have slowed job growth again, making it harder to get a true picture of
the US labour market.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.96 percent, the Standard & Poor’s 500 Index added 1.03 percent and the Nasdaq Composite Index climbed 1.08 percent.
Shares of Walt Disney rallied, last up 5.1 percent, leading gains in the Dow. The company posted a quarterly profit that
beat expectations, bolstered by the success of its animated movie “Frozen”.
“We had an incredibly strong first quarter,” Robert Iger, Walt Disney chairman and CEO, said in a statement. “These
results reflect the strength of our unprecedented portfolio of brands, a constant focus on creativity and innovation,
and the continued success of our long-term.”
However, it was a different story for Twitter. Its shares tanked, last 21.8 percent lower, amid disappointment about
slowing momentum of its user growth.
"A lack of mainstream adoption or a more simplified use case was a worry of ours coming out of the IPO and seems to have
come to the fore faster than we had anticipated," UBS analyst Eric Sheridan said in a note, according to Reuters.
So far, nearly two-thirds of the S 500 have reported earnings this season, with 77 percent surpassing estimates for profit and 66 percent beating sales
projections, according to Bloomberg News.
Shares of Coca-Cola gained, last up 1.4 percent, after the company agreed to buy 10 percent of Green Mountain Coffee
Roasters for about US$1.25 billion. Shares of Green Mountain soared, last up 31 percent.
In Europe, the Stoxx 600 Index finished the session with a 1.5 percent advance from the previous close, as did Germany’s
DAX. The UK’s FTSE 100 added 1.6 percent, while France’s CAC 40 gained 1.7 percent.
Policy makers of the European Central Bank kept rates steady, shifting the rate focus to March. President Mario Draghi
said he saw no signs of deflation.
“The risks surrounding the economic outlook for the euro area continue to be on the downside,” Draghi said in a
statement. “Developments in global money and financial market conditions and related uncertainties, notably in emerging
market economies, may have the potential to negatively affect economic conditions. Other downside risks include weaker
than expected domestic demand and export growth and slow or insufficient implementation of structural reforms in euro
area countries.”
(BusinessDesk)