Apple leads, Greece slides
Greek bonds and stocks tumbled on concern Prime Minister Alexis Tsipras’s government will step up challenges to European policies and backtrack on austerity. U.S. equity-index futures gained following Apple Inc.’s record sales and Boeing Co.’s earnings, while oil declined.
Yields on Greek three-year notes jumped 275 basis points to 16.77% at 8:52 a.m. in New York, up from 10.08% on Jan. 23, before elections brought to power the government opposed to the austerity program. Standard & Poor’s 500 Index futures rose 0.3% and Nasdaq 100 Index futures climbed 1%. The Stoxx Europe 600 Index added less than 0.1%. Oil fell 2% in New York. Treasuries were little changed before a Federal Reserve rate decision.
Greece’s new government questioned moves to impose more sanctions on Russia, adding a foreign-policy angle to its challenge to the status quo in Europe. Investors will be looking for clues on the timing of Fed interest-rate increases after Singapore’s policy makers joined global peers in seeking to stave off deflation. Apple, Yahoo! Inc. and AT&T Inc. rose more than 1% after posting results.
“People might have thought in the election that the tone would change, but the tone hasn’t changed and the market is selling off,” said Michael Markovich, head of quantitative analysis at Credit Suisse Group AG in Zurich. “Bondholders expect more bad news from the Greek government.”
Greece’s 10-year yield rose 101 basis points to 10.49% and the rate on five-year notes reached 13.56%, the highest since the nation’s debt underwent the biggest restructuring in history in March 2012. The ASE Index of stocks slid 8.6%, extending this week’s losses to 15%. National Bank of Greece SA and Piraeus Bank SA plunged at least 25% today.
While Tsipras promised to avoid a “catastrophic clash” with creditors and European governments, he said the new government “will not be forgiven” if it betrays its pre- election pledges to renegotiate the terms of Greece’s bailout.
Declines in Greek debt pulled down securities in the euro area’s other higher-yielding government-bond markets. Italy’s 10-year yield increased eight basis points to 1.61%. Portugal’s climbed 15 basis points to 2.59%.
Three shares declined for every two that advanced in the Stoxx 600, with trading volumes 20% higher than the 30- day average, according to data compiled by Bloomberg.
Electrolux AB jumped 12% as Europe’s biggest appliances maker said fourth-quarter operating profit increased 20%. Nordea Bank AB added 6.3% after raising its 2014 dividend and saying quarterly net income climbed. Anglo American Plc gained 1.7% after reporting that coal and iron-ore output rose in the fourth quarter.
ARM Holdings Plc, the chip designer whose products power more than 95% of smartphones, climbing 1.6%.
Apple jumped 8% in earlier New York trading after reporting a 30% jump in quarterly revenue and a 38% surge in net income to a record $18 billion.
“Although corporate results this week have shown us that earnings season no longer runs smoothly everywhere, Apple’s record numbers have convinced the market,” said Christian Schmidt, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt. “Their profit is larger than any company has ever reported. It looks like we are in for a positive start to trading today.