By Anora Mahmudova and Sara Sjolin, MarketWatch
Priceline Group surges on earnings beat
NEW YORK (MarketWatch)--U.S. stocks switched between small gains
and losses in a thinly-traded session Thursday.
Investors are grappling with a drop in oil prices and a
continued impasse between Greece and its creditors over loans,
while mixed economic reports offered little guidance about the
Federal Reserve's timetable for hiking rates.
The S&P 500 (SPX) was little changed, with six of its main
sectors trading lower. Technology and consumer discretionary stocks
led the gains, while utilities and telecoms stocks saw biggest
declines.
The Dow Jones Industrial Average (DJI) was down 30 points to
18,000, with more than two thirds of its 30 members trading lower.
Boeing Co and IBM Corp led the gains.
Meanwhile, the Nasdaq Composite (RIXF) outperformed other
benchmarks, adding 0.3% to 4,924.
The Russell 2000 (RUT) was up fractionally, and on track to
close at a record level for the fourth time this year.
Kim Forrest, senior investment strategist at Fort Pitt Capital,
said the oil price appreciation over the past few weeks was likely
unwarranted.
"There were no fundamental reasons for oil to recover from $43
to $53 a barrel, so I would argue that that was due to
short-covering trades. So, when investors realize that there is a
lot of oil stored, prices got hit again," Forrest said.
"Weak opening on Wall Street is not surprising, as we have been
getting a lot of weak data, despite strong unemployment figures.
But as interest rates and inflation keep falling, multiples keep
rising. The trend lately has been that stocks open weaker and rise
towards the end," she said.
Forrest also cautioned that disinflation, which is primarily due
to the oil plunge, is temporary.
"Just as disinflation is temporary, multiple expansion is
temporary and when stocks get too expensive they have a tendency to
drop dramatically," she said.
Oil blues: Energy companies and oil-related funds were hit hard,
as crude-oil prices (CLH5) fell more than 2%. Among oil-tracking
indexes, the iPath Goldman Sachs Crude Oil Total Return Index ETN
(OIL) fell 2%, and the Velocity Shares 3X Long Crude ETN (UWTI)
slumped 5%.
Brian Fenske, head of sales trading at ITG, New York-based
brokerage firm, said that investors seem to have been acclimated to
big swings in oil prices.
"Every time we had big swings in oil prices, stocks reacted
accordingly, especially energy stocks. But it looks like investors
have reduced their exposure to the energy sector and there is less
of a surprise. A 3% drop is crude oil is not longer a big deal,"
Fenske said.
Fenske also noted that the week of the Presidents Day holiday
tends to be thinly traded as many investors take this week off.
Data: Economic data on Thursday was mixed. Weekly jobless claims
report was better than expected. Meanwhile, leading U.S. economic
indicators edged up in January but the index pointed to some
moderation in growth. Philadelphia Fed index disappointed, pointing
the economy might have hit a soft patch.
In overseas news, the impasse between Greece and is creditors
continued, after Germany rejected Greece's request
(http://www.marketwatch.com/story/germany-rejects-greeces-loan-extension-proposal-reports-2015-02-19-791282)for
a six-month loan extension agreement. The full Eurogroup of
eurozone finance ministers is scheduled to meet again on
Friday.
'Germany's gone too far': Rejection of Greek debt plan draws
quick Twitter
reaction(http://www.marketwatch.com/story/germanys-rejection-of-greek-debt-plan-draws-quick-twitter-reaction-2015-02-19)
Earnings
T-Mobile US Inc.(TMUS) said it swung to a profit in the fourth
quarter(http://www.marketwatch.com/story/t-mobile-us-swings-to-profit-as-revenue-surges-2015-02-19-64853617)
and reported a better-than-expected increase in revenue. Shares
rose sharply.
Hormel Foods Corp.(HRL) beat Wall Street's earnings
expectations(http://www.marketwatch.com/story/hormel-lifts-guidance-as-after-posting-strong-quarter-2015-02-19)
and raised its 2015 adjusted earnings guidance. Shares rose
0.9%.
Wal-Mart Stores Inc.(WMT) reported quarterly earnings that
missed Wall Street's expectations as it laid out a plan to raise
employee pay. Shares fell 1.1%.
Priceline Group Inc.(PCLN) shares popped 7.5% after profit and
sales beat expectations.
SolarCity Corp.(SCTY) slumped 7.8% after the solar-energy firm
late Wednesday said it swung to a fourth-quarter loss of 4 cents a
share, from a profit of 28 cents a share a year ago.
BJ's Restaurants Inc.(BJRI) surged 10% after reporting a sharp
rise in
profit(http://www.marketwatch.com/story/bjs-restaurants-gains-on-stronger-than-expected-results-2015-02-18)
for the fourth quarter.
For more on notable movers, read our Movers & Shakers
column(http://www.marketwatch.com/story/wal-mart-priceline-t-mobile-earnings-in-focus-2015-02-18).
Other markets: In Asia, Japanese stocks rose to a 15-year
intraday high(http://www.marketwatch.com/storyno-meta-for-guid),
while the rest of Asia closed mixed. Chinese markets were closed
for the Lunar New Year celebrations.
Gold rallied (GCJ5) after the Federal Open Market Committee
minutes dashed hopes of a midyear rate increase.
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