The World Market Financial Summary by Qatar Gulf News

U.S. Markets 

The Standard & Poor’s 500 Index rallied a second day, wiping out its losses for the year, on speculation central banks will support growth even as the American economy shows signs of strength. Data showed fewer Americans filed for unemployment benefits last week. All 10 major groups in the S&P 500 rose.  Raw-material producers climbed 2.4%. Energy shares advanced 2.2%. QEP Resources soared 5.2%, while Valero Energy increased 5.7%. Chevron rallied 2.3% and Exxon Mobil climbed 1.7%. Technology companies in the S&P 500 gained 2.3%. Microsoft and Intel increased at least 1.9%. UnitedHealth Group and DuPont surged more than 3% to lead gains in the Dow. The Dow Jones Transportation Average jumped 2.2%, with Union Pacific, Southwest Airlines and FedEx advancing at least 2.3%.

Asian Markets

Asian stocks rose a 2nd day, led by commodity and energy producers. Japanese stocks also rose on speculation central banks will support growth even as the U.S. economy shows signs of strengthening. Fast Retailing, operator of the Uniqlo clothing brand, added 0.8% after net income beat analyst estimates. On the negative, airlines sank the most among the 33 Topix index industry groups as crude prices advanced for a 3rd day. Mazda Motor slumped 4.2% after JPMorgan Chase cut its rating on the stock and predicted lower earnings from emerging markets.

European Markets 

European stocks climbed the most in 3 weeks amid optimism monetary policies by central banks will support the economy. ECB President Mario Draghi said in a letter that central bank stimulus measures may include sovereign-bond buying. Data showed producer prices slid more than analysts anticipated in EU and German factory orders fell more than forecast in November. Santander rose 3.3% before the Spanish market regulator suspended the stock, after it said it is raising as much as EUR 7.5bn. Tesco surged 15%, the most since at least 1988, after CEO Dave Lewis set out a plan for reviving the struggling U.K. grocer. Pernod Ricard added 5.3% after Bank of America recommended buying shares. On the negative, Marks & Spencer Group lost 3.5% after saying same-store sales at a division that includes its apparel business dropped 5.8% in Q3, missing analysts’ estimates.

CORPORATE NEWS

U.S. Markets

AT&T Inc.

The U.S. Federal Communications Commission is considering fining AT&T Inc. for failing to adequately notify customers about reductions in mobile data speeds for some heavy users, a practice known as “data throttling,” the company said. The FCC is investigating whether AT&T Mobility violated government rules and orders concerning Internet service, the agency said in a letter AT&T filed in court Jan. 5. The Federal Trade Commission accused the company in a 2014 lawsuit of deceiving at least 3.5 million smartphone customers who paid for unlimited data plans and had their transmission speeds drastically reduced. The company disclosed the FCC probe in court documents seeking dismissal of the case.

Bed Bath & Beyond Inc.

Bed Bath & Beyond reported its fiscal Q3 net income dropped by 5% to $225.4m, $1.23 per share. Earnings, adjusted for non-recurring gains, came to $1.19 per share, the company said, in line with average analysts forecast. Revenue stood at $2.94bn in the period, short of forecasts. Analysts expected $2.97bn, according to Bloomberg. Comparable sales in Q3 rose by 1.7% YoY, below estimates for a 2.8% YoY rise. Nevertheless, Bed Bath & Beyond expects FY earnings to be $5.05 to $5.09 per share, from a previous forecast for EPS of $5.00 to $5.08. Bed Bath & Beyond sees year net sales up by 3.4% to 3.6% from a prior view for a 3.4% to 3.9% rise in September. That compares with the average analyst estimate of $5.04 per share and net sales up by 4% YoY. Bed Bath & Beyond still expects Q4 adjusted EPS of $1.78 to $1.83, compared to forecasts for $1.81, and net sales up by 4.4%-5.4%, compared to forecasts for +5%.

GAP Inc.

Gap December comparable sales were up 1%, above estimates for a 0.1% rise.

Macy’s Inc.

Macy’s said it plans restructuring and sees up to $110m charges. Macy’s is cutting workforce in some functions and locations and adding in others with the workforce expected to remain at c. 175k associates. It will also be closing 14 Macy’s stores in early spring 2015. The company maintained its 2014 EPS view between $4.25 to $4.35, including the estimated charges of $100m to $110m related to restructuring in merchandising and marketing, asset impairment charges and interest expense. Macy’s narrowed its Q4 comparable sales growth forecast to 2.5% to 3% on owned plus licensed basis, from a previous view of 2% to 3%;

Starbucks Corp.

Starbucks chief operating officer Troy Alstead, a 23-year veteran of the company who also served for many years as the company’s chief financial officer, as well as leading the operations and development of Starbucks international business and its Europe, Middle East and Africa business unit, is taking an extended unpaid leave from the company. His last day in his current role will be March 1, 2015. Further transition plans will be detailed by Alstead and Schultz on the company’s Q1 earnings call, scheduled for January 22, 2015.

European Markets

Banco Santander

Banco Santander said it plans to sell shares for as much as EUR 7.5bn and will cut its dividend, reducing the payout it had offered investors since 2007. Santander’s board approved the sale of shares and a cut to the dividend Chairman Ana Botin’s father Emilio put in place in 2007, before the financial crisis took hold. Shares were suspended in Madrid by the Spanish market regulator and dropped 7% in the U.S. The sale will run as an “accelerated” process, the bank said. Santander will switch its dividend policy to four payments of 5 cents, with three in cash, from 60 cents per share in four payments offered in the form of stock. The change to the dividend policy will become effective from the first dividend to be paid against 2015 earnings.

Tesco

Tesco was cut to below investment grade at Moody’s Investors Service, on concerns revival will take time. The senior long-term rating was cut to Ba1 from Baa3, the last investment-grade level. CEO Dave Lewis said that there was no need for a fire sale of assets, describing Tesco’s funding and liquidity as “really robust” after the company secured a GBP 5bn loan last year. In an effort to win back customers lost to discounters, Lewis is changing the way the grocer works with suppliers, adding staff at stores and cutting prices.