Stock Market News (US Open) – European markets on the rise; DAX at all-time high; Dow opens above 23,000


Carol, XM Investment Research Desk

The picture in Europe was broadly positive as US traders were commencing their trading day with the pan-European Stoxx 600 being up by 0.4% and not far away from the four-month high of 392.42 that was recorded a couple days ago. All industry sectors comprising the Stoxx 600 were in the green with technology leading the gains.

The UK’s FTSE 100 was higher by 0.5%, with the German DAX and French CAC 40 higher by 0.6%. The German index was looking set to close at a record high, having also recorded an all-time high of 13,094.76 earlier in the day. The CAC 40 today rose to its highest in five months. The Spanish IBEX 35, which has been weighed by political uncertainty over the situation in Catalonia, was lower, though only by 0.1% after falling by as much as 0.5% earlier in the day. The situation could worsen tomorrow should Madrid proceed with suspending Catalonia’s autonomy (the Catalan government was given until Thursday to back down from its symbolic independence declaration).

Banco de Sabadell and Caixabank (both down by 1.0%), which have a significant portion of their deposits coming from Catalonia, were among the IBEX’s worst underperformers, also making the top-10 list of worst performing stocks within the Stoxx 600 Banks sub-index. The sub-index itself was up by 0.2% with BNP Paribas (up 1.8%) leading the gains. The French-based bank’s target price was today revised upwards to 83 euros from 82 by investment bank Goldman Sachs. BNP Paribas last traded at 67.45 euros.

Also pertaining to Caixabank and Banco de Sabadell, the two lenders (Spain’s third and fifth biggest bank respectively) recently moved their registered offices out of Catalonia as a result of uncertainty regarding the region’s future. According to a source linked to Banco de Sabadell’s board, the lender is also contemplating on whether to move some of its top management from Catalonia to the Spanish capital.

ISS A/S (Integrated Service Solutions) the Danish-based facility services company topped the list of Stoxx 600 gainers after securing a new contract to deliver integrated facility services to Deutsche Telekom. ISS was last up by 4.4% with the DAX constituent Deutsche Telekom rising by 1.3% to make the list of top-10 performers within the German blue-chip index.

Finnish telecommunications company Elisa Oyj (down 5.7%) remained the Stoxx 600’s worst underperformer after communicating that it expects long-term structural challenges including a competitive market ahead. The company also reported quarterly results, with revenues and EBIT coming in more or less as expected.

With the market open at 1330 GMT the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite rose by 0.4%, 0.1% and 0.15% respectively. The Dow opened above the 23,000 milestone for the first time in its history.

IBM reported quarterly results with net income falling, though earnings per share beat analysts’ expectations ($3.30 Vs $3.28 expected). Revenue also grew more than expected with the company hinting to sales growth after almost six years of contraction. The tech company is a Dow and S&P component stock.

In other company news, the multinational health care company Abbott Laboratories (an S&P constituent) reported earnings that exceeded analysts’ estimates. Chipotle Mexican Grill (also an S&P constituent) is expected to be on a negative footing after Bank of America Merrill Lynch cut the company’s stock to “underperform” from “neutral” and reduced its price target by a sizable $105 to $285.

E-commerce corporation eBay will be among those companies reporting results after today’s market close.