U.S. stocks closed little changed on Tuesday after the International Monetary Fund reduced its growth forecasts for 2015 and 2016, increasing speculation central banks would take more aggressive policy moves to spark economic improvement.
The lower forecasts implied less demand for fuel through 2016, contributing to another fall in crude oil, although some bullish results from major energy companies kept the sector afloat. The S&P energy index eked out a gain of 0.09 percent.
The IMF cut its forecasts for both years by 0.3 percentage points and advised advanced economies to maintain accommodative monetary policies to avoid increases in real interest rates as cheaper oil increases deflation risk.
The European Central Bank is expected to announce a bond buying program on Thursday to boost the region’s flagging economy.
«Any sense at all that the ECB disappoints, you will see the markets correct rather harshly,» said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.
«You can speculate all you want and investors can take the market higher all they want, but until the ECB comes out and says it, you are not really going to know.»
The Dow Jones industrial average rose 3.66 points, or 0.02 percent, to 17,515.23, the S&P 500 gained 3.12 points, or 0.15 percent, to 2,022.54 and the Nasdaq Composite added 20.46 points, or 0.44 percent, to 4,654.85.
U.S. crude settled down 4.7 percent to $46.39 per barrel, after hitting an intraday low of $45.89, while Brent settled down 1.8 percent at $47.99.
Halliburton Co and Baker Hughes Inc warned that a fall in drilling activity would hurt 2015 results, though the companies also reported better-than-expected fourth-quarter profits. Halliburton rose 1.8 percent to $39.83 while Baker gained 1.2 percent to $57.26.
Johnson & Johnson fell 2.6 percent to $101.29 as the biggest drag on both the Dow and S&P 500 after adjusted earnings beat expectations but revenue missed forecasts.
Morgan Stanley reported a drop of 81 percent in revenue from trading fixed-income securities, currencies and commodities, though earnings rose on a sharp drop in legal costs. Shares dipped 0.4 percent to $34.75.
FXCM Inc plummeted 87.3 percent to $1.60 on volume of over 91 million shares, its most active day ever. The retail foreign exchange laid out details of a rescue loan after $200 million of losses on last week’s shock removal of the cap on the Swiss franc.
After the closing bell, Netflix shares surged 12.1 percent to $391 after posting a quarterly revenue increase of 26.3 percent, while IBM lost 1.6 percent to $154.51 after its results.
NYSE declining issues outnumbered advancers 1,894 to 1,207, for a 1.57-to-1 ratio; on the Nasdaq, 1,639 issues fell and 1,128 advanced, for a 1.45-to-1 ratio favoring decliners.
The S&P 500 posted 47 new 52-week highs and 17 new lows; the Nasdaq Composite recorded 70 new highs and 109 lows.
Volume was moderate, with about 7.2 billion shares traded on U.S. exchanges, roughly in line with the 7.29 billion average so far this month, according to BATS Global Markets.
European shares climbed to a new seven-year high after data showed China’s economic growth had slowed less than feared and expectations grew that the European Central Bank would launch a quantitative easing programme later this week.
The pan-European FTSEurofirst 300 ended 0.9 percent higher at 1,422.79 points after touching 1,428.22, a new seven-year high. The European basic resources index jumped 2.3 percent, the top sectoral gainer, after the economic data from China, the world’s biggest metals consumer.
Figures showed China’s economy grew 7.4 percent in 2014, its slowest pace in 24 years and just missing the official 7.5 percent target. But the data was welcomed with relief by investors who had feared a sharper slowdown.
A survey showed German analyst and investor sentiment jumped in January for the third straight month, helped by low oil prices and a weaker euro, boosting hopes for a rebound in Europe’s biggest economy.
The market was further aided by broad expectations that the ECB is set to unveil a programme to print money and buy bonds when it meets on Thursday in a bid to revive the euro zone economy and inflation.
Stocker said ECB bond-buying was likely to put further pressure on the euro, which in turn would help export-oriented European companies. A likely fall in bond yields would meanwhile make higher-yielding assets like equities more attractive.
Across Europe, Britain’s FTSE 100 rose 0.5 percent, France’s CAC was up 1.2 percent, Germany’s DAX rose 0.1 percent and Spain’s IBEX gained 1.2 percent.
Greek stocks lost ground again, with Athens’ ATG index falling 1.2 percent after two opinion polls showed anti-bailout opposition party Syriza moving further ahead of the ruling conservatives before Sunday’s election.
Danish stocks also underperformed, with the OMX Copenhagen 20 index up just 0.2 percent. Denmark’s central bank cut its certificate of deposit and lending rates by 0.15 percentage points on Monday to stop the crown strengthening after the Swiss franc’s cap to the euro was scrapped last week.
Danish enzyme maker Novozymes rose 5.8 percent, however, with traders citing a new buyback programme as one of the catalysts.
Dutch firm Philips gained 2.6 percent on a report saying private equity groups had signalled interest in the group’s lighting division.
Unilever fell 0.6 percent after posting lower-than-expected fourth-quarter underlying sales growth, while Europe’s largest software group, Germany’s SAP SE , was down 4.6 percent after cutting its 2017 operating profit outlook.
utnumbered advancing ones on the NYSE by 2,115 to 915, for a 2.31-to-1 ratio; on the Nasdaq, 1,868 issues fell and 810 advanced for a 2.31-to-1 ratio favoring decliners.
The S&P 500 was posting 45 new 52-week highs and 17 lows; the Nasdaq Composite was recording 52 new highs and 90 lows.
Source: Buenos Aires Herald
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