Monday, January 20, 2014

US Mixed as Factory Output Fastest in 3.5 Years

US equities ended the week mixed as a fresh batch of economic data and corporate results did not offer much direction. The Dow ticked up 0.3%, while the S&P 500 dipped 0.4% and the Nasdaq was 0.5% lower. Markets are closed on Monday and will reopen Tuesday.

In macro news, US industrial production expanded 6.8% in 4Q-13, the fastest quarterly growth last seen in 2Q-10. A separate report from the University of Michigan showed consumer sentiment slipped in January, a sign spending may cool off early this year.

Ground-breaking for new homes fell 9.8% in December, the largest drop in eight months, as frigid temperatures cooled demands. The decline, however, was smaller-than-expected. Housing starts touched a six-year high earlier in November.

On the corporate front, General Electric missed profit forecasts, but its quarterly revenue topped estimates, driven up by the company’s industrial businesses. American Express’ 4Q profit was more than double from a year ago, as consumers spent more during the holiday season.

Europe equities rose, fuelled by a rally in mining names on higher hopes for a global growth pickup. Bucking the regional trend, Royal Dutch Shell tumbled after issuing a profit warning for 4Q-13.

Elsewhere, retail sales in the UK jumped 5.3% on-year in December, driven by growth in small stores and online sales. The figure grew at the fastest pace since October 2004.

Japan markets ended almost flat as investors refused to make fresh bets after soft US earnings results. For the week, the  benchmark Nikkei-225 closed 1.1% lower.