HP Shares Rise After Earnings Beat, Sales Show Momentum

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Hewlett Packard Inc. shares jumped after hours on Wednesday after the company reported higher-than-expected sales and earnings for its fiscal second quarter and showed accelerating sales momentum in the second quarter, delivering growth in both personal computers and printers for the first time in more than a half-decade.

The Palo Alto, California-based giant reported second quarter earnings of 40 cents per share, beating analysts’ estimates by a penny, 39 cents. Revenue also went up 7% to $12.4 billion in the period that ended in April, beating Wall Street’s $11.93 billion expectations for the quarter and analysts’ estimates for the fourth consecutive quarter.

Moreover, the company gave a forecast for third quarter profit that were unevenly in line with the market’s guidance for the period. The forecast may also top projections and raised its outlook for the fiscal year, and that followed an upbeat quarterly report in February.

Chief Executive Dion Weisler noted that it is the first quarter in which both PC and printing revenue increased year-over-year since 2010, with PC sales growing 10% and printing revenue increasing 2%. He has also been looking for the right lineup of products to grab share in markets that have been under pressure since his company’s split from Hewlett Packard Enterprise Co.

Consumer demand helped drive stronger growth in the recent period, and laptop unit shipments jumped 12%, reflecting a PC industry that finally showed a spark of growth for the first time since 2012. The company has also been putting money up for new printer products, while paying out marketing dollars to create new business.

Shannon Cross, an analyst, said in an email that a consistent performance is basically what the investors look for, that there is “continuing benefit from investments made over the past few years in notebook innovation.”

HP shares have climbed 28% this year through Wednesday’s close and the stock jumped as much as 9.2 percent in extended trading, having outperformed Hewlett Packard Enterprise.

The company also improved its forecast for the current fiscal year, which ends in October. Full-year adjusted profit from continuing operations should be $1.59 to $1.66 a share, up from previous guidance of $1.55 to $1.65. Analysts on average, estimate $1.62 in annual profit.

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European Stocks Mixed in Cautious Trading

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European stocks were mixed in cautious trade on Wednesday amid a rare credit downgrade for China and the rising security condition in United Kingdom, wherein Prime Minister Theresa May raised the level of terrorist threat to “critical” last night and warned that a new attack is possibly imminent, keeping investors in a caution mood as markets were still recovering from the Manchester bombing.

The region-wide Stoxx Europe 600 index held onto a modest 0.14% gain to 392.59 while the Euro Stoxx 50 fell 0.19% to 3590.50. But regional benchmarks, including France’s CAC 40 and Germany’s DAX 30 performance index both edged down modestly, 0.11% to 5,342.35 and 0.2% to 12,633.25 respectively.

Financial stocks were mixed as well,  as BNP Paribas surged 0.66% to 66.62, and Societe Generale added up 0.54% to 50.27, while Commerzbank slipped 0.16% to 9.605, as well as Deutsche Bank at 0.82% to 16.980.

Among peripheral lenders, Italy’s Intesa Sanpaolo dropped 0.82% to 2.670. Unicredit, however, edged back up 0.18% to 16.9000. Spanish banks BBVA slipped 0.28% to 7.458, while Banco Santander surged 0.24% to 5.851.

Elsewhere, Daimler AG NA O.N. saw decline in shares 2.5% to 65.510 after German prosecutors said they would look for 11 offices and sites of the company as part of an investigation into possible diesel emissions fraud.

On the downside, Nokia slipped back 1.53% to 5.785 after jumping 1.01% following its agreement with Apple in regards to a number of the Finnish company’s patents, with many pertaining to healthcare and fitness products.

 

In London, FTSE 100 went up 0.35% to 7,511.75, weighed by Kingfisher, whose shares plummeted 6.68% after the company reported a first-quarter decline in sales due to a slowdown in its French market.

Babcock International Group PLC rallied back, as shares were barely up 0.05% to 968.00, as the infrastructure company reported a 9.7% climb in pre-tax profit to £362.1 million for the financial year ended March 31.

Marks and Spencer Group PLC was also on the positive side, with shares going up 2% to 394.60, even after the retailer announced a 64% decline in annual profit.

Mining stocks were mostly lower on the commodity-heavy index. Shares in Glencore retreated 1.35% and Randgold resources tumbled 0.76% to 7190.00, while Fresnillo and Rio Tinto plummeted 0.63% and 0.89% respectively.

In the financial sector, stocks were broadly higher as HSBC Holdings edged up 0.43% to 669.80 and Lloyds Banking rose 1.23% to 73.05, while the Royal Bank of Scotland climbed 1.74% to 269.30, as well as Barclays with shares went back up 0.61% to 215.59.

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Cisco Shares Drop after Revenue Declines, To Lay Off 1,100 Jobs

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Cisco’s shares dropped quickly 1.37 percent at $33.83, in after-hours trading after it projected a steeper-than-expected drop In sales and lower-than-predicted profits for the current quarter. Also, it said it would cut 1,100 more jobs, as the world’s largest networking gear maker steps up efforts to transform into a software-focused company.

The San Jose, California-based U.S. tech giant said that it expected revenue for its fourth quarter to fall between 4-6 percent from a year earlier, implying a range of $11.88 billion-$12.13 billion.

Its shares fell more than 6% percent in after-hours trading to $31.05 on Wednesday after the figures were released, before pulling back on some of the losses to exchange down 5.1% percent following the closing bell.

The projection comes alongside Cisco’s release of earnings from its third quarter, which ended April 29.

Revenue came in at $11.9 billion, a 1 percent year-on-year drop. Net income went up 7% percent compared to the same period a year ago to $2.5 billion, a hair ahead of the $2.43 billion that was expected. Earnings per weak share were 50 cents, a 9% percent year-on-year improvement, and better than the 47 cents that was being looked for.

Cisco said in its release that it was expanding the number of employees that would be laid off by a restructuring plan initially announced in August, which was expected to cut 5,500 workers, resulting in $150 million in additional pretax charges. It will now include an additional 1,100 employees as well.

“The network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure,” said Chuck Robbins, chief executive officer of Cisco.

Moreover, the tech giant said orders in its public sector business, which includes sales to federal, state and local governments, fell 4% percent in the third quarter ended April 29.

“It’s a pretty significant stall right now with the lack of budget visibility,” Chief Executive Chuck Robbins said on an earnings call.

Cisco, like other legacy technology players, will be turning its focus to high-growth areas such as security, the Internet of Things and cloud computing, amid intense competition from companies such as Huawei and Juniper Networks Inc.

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Nikkei slips after weak U.S. data, financial stocks underperform

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Japanese stocks slipped on Wednesday morning after the dollar eased against the yen on weak U.S. economic data, while financials stocks underperformed hit by lower US yields. The Nikkei shares average dropped  0.5 percent to 19,814.88 as of 2:15 AM EDT. The dollar slipped as well 0.5 percent to one-week lows against its perceived safe-haven Japanese counterpart and currently standing at 112.49 yen. Meanwhile, U.S. housing starts plummeted 2.6 percent to a seasonally adjusted annual rate of 1.17 million units, the lowest since November.

The market’s mood was further lessened by flagging confidence over the US president Donald Trump’s ability to push through tax reforms and stimulus programs that investors had been hopeful for since his election in November.

Recently, Trump asked his now-dismissed FBI Director James Comey to finish off the agency’s investigation into ties between former White House national security adviser Michael Flynn and Russia, according to a source who had seen a memo written by Comey.

“We still can’t say clearly that this Trump’s case is a serious risk to the stock market yet. But people are watching if it leads to more serious problems such as a difficulty for him to push through his tax reforms and fiscal policy,” said Takuya Takahashi, a strategist in Japan.

Overnight, financial stocks such as insurers and banks – that earn profits from investing in higher-yielding products stumbled after U.S. Treasury yields dropped down as low as 2.31 percent.

Moreover, Dai-ichi Life Holdings fell 4.0 percent, Sompo Holdings dropped 1.8 per cent, while Mizuho Financial Group flagged 2.4 per cent.

Domestic-demand-sensitive stocks, such as utility and food shares, gained as investors stayed defensive. Tokyo Gas moved up 2.3 percent, and Ajinomoto and Japan Tobacco both went up 1.3 per cent.

The broader Topix shed 0.5 percent to 1,575.82 and the JPX-Nikkei Index 400 declined 0.6 percent to 14,063.86.

While in commodities trading, Crude oil for June delivery was down 0.64% or 0.31 to $48.35 a barrel. Brent oil for delivery in July dipped as well 0.39% or 0.20 to hit $51.45 a barrel, while the June Gold Futures contract kept on increasing 0.50% or 6.20 to exchange at $1242.60 a troy ounce.

USD/JPY was down 0.56% to 112.49, while EUR/JPY rose 0.48% to 124.77.

The US Dollar Index Futures was down 0.13% at 98.06.

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Stocks Rise in Asia as Oil Extends Gains

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Stocks in Asia rose higher, climbing to a fresh-two year high on Tuesday, while oil extended gains after major producers, Saudi Arabia and Russia agreed to an extension of supply cuts until 2018.

Stock benchmark indexes in Australia and Japan climbed, offsetting losses in China shares, after the S&P 500 Index closed above 2,400 for the first time. Crude rose for a fifth day, topping $49 a barrel as Saudi Arabia and Russia extending output cuts will probably influence other countries to follow. Shenzhen shares increased while those in Shanghai erased an earlier decline after the closing of a global summit in Beijing. The yen fortified with the Mexican peso and South Korean won.

The surge in oil is keeping the global stocks bullish even as concern rises over the strength of the global economy. Chinese industrial production and retail data came in weaker than expected Monday, after American retail sales and inflation also cast a shadow on growth. Financial markets have also gotten a boost from China’s sweeping plan to improve global infrastructure.

“At the moment we are taking inspiration from the higher oil price and what it means for energy prices across the world; what it means for (capital expenditure); and what it means for reflation — and of course the market loves reflation,” said Chris Weston, a chief market strategist in Australia.

Main Moves in Financial Markets

The MSCI Asia Pacific Index increased 0.2 percent as of 10:54am in Tokyo, heading for the highest closing level in 2 years. Japan’s Topix rose 0.3 per cent, while the Nikkei 225 Stock Average climbed to within two points of reaching 20,000 before pulling back. Australia’s S&P/ASX 200 climbed 0.2.

China shares traded in Hong Kong retreated 0.6 percent after surging 1.6 percent on Monday following optimism over Beijing’s infrastructure spending program. The Shanghai Composite Index slumped 0.7 per cent and the Hang Seng Index lost 0.3 percent.

Oil added 0.6 per cent to US$49.12 a barrel, after surging 2.1 per cent on Monday while Gold gained 0.3 percent to US$1,234.61 an ounce, rising for a fourth straight sessions.

The yen rose 0.2 percent to 113.52 per US dollar, after dropping 0.4 percent on Monday. The South Korean won increased 0.4 percent to the highest since April 4, while the Mexican peso added 0.3 percent.

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European Stocks Fall Over Political Concerns

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European stocks edged lower on Wednesday due to growing concerns over the Brexit negotiations and as investors wait for the second round of the French presidential election on May 7.

Euro Stoxx 50 (STOXX50E) was down from 0.02 percent during the morning tradeto 0.08 percent to €3,575.

France’s CAC 40 (FCHI) slipped 0.2 percent to €5,289 while Germany’s DAX index (GDAXI) remained 0.1 percent down to €12,485.

Stock markets were on edge following France and Germany’s demand to raise Britain’s Brexit bill gross payment of up to €100 billion ($109 billion).

Investors are also staying cautious as French political rivals Emmanuel Macron and Marine Le Pen will battle each other in one last televised debate on Wednesday evening before Sunday’s voting.

Meanwhile, the US Federal Reserve (Fed) wraps up its two-day meeting on Wednesday and is likely to hold interest rates steady. The Fed was expected to release its monthly monetary policy decision later in the day.

The central bank was also set to hold interest rates with investors looking for any clues on the speed of future rate hikes.

Financial stocks were mostly higher on Wednesday with BNP Paribas SA (BNPP) gaining 0.3 percent to €66.00 and SocieteGenerale (SOGN) climbing 1.1 percent to €51.07. Germany’s Commerzbank AG O.N (CBKG) also rose 0.1 percent to €9.085.

Peripheral lenders also performed well, including Italy’s IntesaSanpaolo (ISP) getting 0.1 percent boost to €2.684 and UniCreditSpA (CRDI) increasing by 1.5 percent to €15.3500. Spain’s Banco Bilbao VizcayaArgentaria (BBVA) was up as well by 0.7 percent to €7.497.

German-based healthcare firm Frensenius SE & Co (FREG) added 2.9 percent to €77.720 to its shares after the company reported a 28 percent boost in net income for the first quarter and rise in sales of 19 percent.

Hugo Boss’ shares also fell 4 percent to €66.440 after reporting another loss in online sales by 27 percent in the first three months of the year even though total sales were up 1 percent to €651 million and net profit rising 25 percent to €48 million ($52 million).

Despite growing results in the financial sectors, London’s stocks were on the downside. FTSE 100lost 0.3 percent to £7,225 subsequent to supermarket J Sainsbury’s drop in shares of about 2.22 percent.The food retailer’s current stock price slipped 4 percent to £268.10 on Wednesday.

Mining stocks in the country were low as well. Glencore PLC (GLEN) dropped 3 percent to £288.45, Antofagasta (ANTO) also lost 3 percent to £777.50 and BHP Billiton (BLT) edged down by 3 percent as well to £1,131.50.

Financial sector was also performing poorly on Wednesday with Lloyds Banking Group (LLOY) falling 0.3 percent to £68.98 and HSBC Holdings (HSBA) receiving a 0.1 percent decline to £639. Barclays (BARC) got a 0.3 percent cut to £209.10 while the Royal Bank of Scotland (RBS) fell 0.04 percent to £264.50.

InterContinental Hotels Group (IHG) gained 1.1 percent to £4,161.

Shares of UK-based Company Dialog Semiconductor which provides power management systems for Apple Inc fell 3 percent to €41.8600 due to weak sales in its flagship iPhone missing average estimates in the second quarter.

Meanwhile, the stocks in the US were also lower on Wednesday with Dow Jones 30 losing 0.08 percent to $20,849, S&P 500 was down 0.1 percent to $2,382 and Nasdaq 100 futures dropped 0.2 percent to $5,623.

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Global Stocks Edge Higher

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Global shares boosted on Tuesday as stocks in the tech industry settled higher on Monday and as the concerns over North Korea alleviate.

Asian Stocks

Asian stocks rose to almost two-year highs with MSCI’s broadest index of Asia- Pacific shares outside Japan gaining 0.3 percent to 149.40 while Japan’s Nikkei 225 (N225) got a 0.7 percent increase to ¥19,452 ($173.45).

South Korea’s tech giant Samsung Electronics earned 0.6 percent to  ₩2,245 on Monday providing the country’s KOSPI (KS11) a 0.6 percent closing high to ₩2,219 ($1.96).

Taiwan Semiconductor Manufacturing closed 1 percent higher to $33.40.

Hong Kong’s Hang Seng (HSI) increased 0.1 percent to HK$24,659 ($3,168) while Shanghai’s Composite Index (SSEC) closed with a 0.3 percent decline to CN¥3,143 ($455.73) on Tuesday.

Tencent Holdings was up 1.8 percent to HK$248 ($31.87) on Monday.

India’s Nifty 50 (NSEI) got a 0.07 percent gain to ₹9,310 ($145.05) whereas BSE Sensex 30 (BSESN) was down 0.10 percent to ₹29,887 ($465.64).

Jakarta’s Stock Exchange Composite Index (JKSE) was up 0.04 percent to Rp5,687 ($4.27).

Australia’s S&P/ASX 200 (AXJO) ended its session with a 0.10 percent cut to AU$5,950 ($4,480).

European Stocks

European shares are growing as well on Tuesday after the market holiday on Monday with Britain’s FTSE 100 (FTSE) gaining 0.4 percent to £7,237 ($9,311) and Germany’s DAX (GDAXI) going up by 0.2 percent to €12,468 ($13,601).

France’s CAC 40 (FCHI) also rose 0.2 percent to €5,277 ($5,760) while Italy’s FTSE MIB (FTMIB) earned 0.5 percent to €20,727 ($22,621).

Euro Stoxx 50 (STOXX50E) was up 0.08 percent to €3,563 ($3,889) on Tuesday.

Spain’s IBEX 35 grew 0.4 percent to €10,764 ($11,747).

US Stocks

Wall Street indices on Monday presented S&P 500 (SPX) with a 0.1 percent high to $2,388 while the NASDAQ Composite (IXIC) gave a record closing high of 0.7 percent to $6,091.Nasdaq 100 (NDX) also rose 0.8 percent to $5,629.

However, Dow Jones Industrial Average (DJI) closed the session on Monday with a 0.1 percent cut to $20,913. The US Dollar Index is steady at $98.98.

According to Yukino Yamada, strong demand for various products associated with the so-called Internet of Things (IoT) in which standard products are connected to networks, are what supporting the hi-tech demand.

The world’s five tech giants by market capitalization all received gains within one day with Amazon Inc on the lead gaining as much as 2.5 percent to $948 followed by Google parent Alphabet Inc receiving 0.9 percent boost to $932.

Tagging along Google was Apple Inc. raising 2.04 percent to $146 who was then followed by Facebook Inc with 1.47 percent high to $152.

Concerns over North Korea’s nuclear program eased on Monday due to US President Donald’s Trump statement on Monday saying that he would be willing to meet with North Korean leader Kim Jong Un but under the right circumstances.

Commodities

Even though tensions over the North Korean peninsula has alleviated, gold futures is still gaining on Tuesday with 0.08 percent high to $1,256. Silver also edged up 1 percent to $17.023 while copper fell 1 percent to $2.626.

Oil prices were also up with crude WTI adding 0.3 percent to $48.99 a barrel while Brent rose 0.5 percent to $51.78 a barrel.

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