Stocks slip as ECB gets cold feet on QE, gold rebounds

January 21, 2015 10:42 AM

U.S. Earnings

IBM declined 2.7% after forecasting that 2015 operating earnings would not exceed $16.50. Analyst estimates ranged from $15.17 to $18.55, according to data compiled by Bloomberg. Qualcomm Inc. dropped 3.5% as people familiar with the matter said Samsung Electronics Co. will not use its chip in the next version of its smartphone.

Netflix jumped 18% after saying a record gain in international subscribers boosted the worldwide total to 57.4 million.

“The market is being weighed down by the big stocks in the index,” Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust, said in a phone interview. “Those household names being down take a toll on the market mood. Nowotny’s comments are stoking the fire and raising concerns that European QE won’t be as much as investors hoped for.”

Emerging Markets

Housing starts increased 4.4% to a 1.09 annual rate, following the prior month’s 1.04 million pace that was higher than previously estimated, a Commerce Department report showed. The median forecast of 82 economists surveyed by Bloomberg was 1.04 million. Permits, a proxy for future construction, declined 1.9% in December to a 1.03 million pace.

The MSCI Emerging Markets Index rose 1.6%, heading for the highest close since Dec. 8, as China extended a rebound. The Shanghai Composite Index jumped 4.7%, after rising 1.8% yesterday. The gauge plunged 7.7% on Monday after the securities regulator suspended three brokerages from loaning money to new equity-trading clients.

“We would suggest that the regulator is not trying to reverse the bull trend in the overall market,” Jonathan Garner and Laura Wang, strategists at Morgan Stanley, wrote in a report. “The A-share bull run is intact although it is likely to proceed at a slower pace from here on out.”

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 2.4%.

Oil Price

Russia’s Micex Index added 2.5%, advancing for the first time in three days. The ruble weakened to 65.4022 versus the dollar.

Brazil’s Ibovespa advanced 0.7%.

Oil rebounded from the biggest drop in a week amid the most volatile prices in more than three years. Oil climbed 2% to $47.40 a barrel in New York, retracing a 4.7% slide on Tuesday.

OPEC policies are protecting market share over revenue, Oman’s Oil Minister Mohammed Al-Rumhy said at conference in Kuwait City. The nation is not part of the Organization of Petroleum Exporting Countries.

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