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US Equities
Nike disappoints amid Fed-fuelled rally
From the Financial Times of Fri, 19 Dec 2014 22:37:59 GMT
Nike

Nike shares fell out of favour after future orders at the US sportswear group disappointed Wall Street, going against the trend in stronger overall US equities markets.

Although future orders only just fell short of expectations, it was enough to hit a stock that has comfortably outperformed the S&P 500 this year. The shares fell 2.3 per cent to $94.84, leaving their gain for the year at 20 per cent.

Nike’s quarterly results, however, underlined why investors had chased the shares higher this year and were setting higher expectations. Profits climbed 23 per cent and revenues rose 15 per cent

The slump in the oil price provided a boost for Carnival, the world’s biggest cruise operator.

Shares rose almost 1 per cent to $44.79 as the company behind the eponymous brand, as well as Costa Cruises, said it expected its fuel bill to drop by $475m in its current financial year, which began at the start of the month.

This was worth 61c a share in full-year profits, according to Carnival, which now forecasts will be between $2.30 and $2.60 a share. Wall Street was expecting $2.36, according to a poll by Bloomberg.

Cheaper oil has contributed to a 30 per cent rally in Carnival shares since mid-October.

Arnold Donald, chief executive, said the company had “worked hard to contain costs and achieved an almost 5 per cent reduction in fuel consumption for the year as we continue to implement energy conservation measures”.

Carnival has been spending heavily on marketing to arrest setbacks that have damaged its reputation, most notably the Costa Concordia disaster off the Italian island of Giglio in 2012.

The company said profits for the year to November 30 rose to $1.2bn, or $1.59 a share, from $1.1bn, or $1.39, in the year-ago quarter.

Shares in Ally Financial surged more than 2 per cent to close at $23.25 after the US Treasury sold its remaining 54.9m shares at that price, against the previous closing price of $22.75 on Thursday.

The sale will allow Ally to exit the troubled asset relief programme, which was put in place during the financial crisis.

Xerox shares also received a fillip from news that the company had agreed to sell its information technology outsourcing arm to the French IT services company Atos SE for $1.05bn.

Xerox shares rose as much as 2.2 per cent to $14.20 after the group said it would divest a slower-growing unit to focus on building up its business-process outsourcing and document outsourcing operations.

The company has seen its market value rise from a low of $10.26 in February this year as it restructures.

Overall, US equity markets extended their gains, after a surge over recent days in the S&P 500 benchmark index sparked by the US Federal Reserve’s latest policy statement.

The S&P had climbed 4.5 per cent over the previous two sessions, lifted by the central bank’s commitment to take a “patient” approach towards raising interest rates, while signalling it was on track to boost rates in 2015, providing more certainty for investors.

The S&P 500 index gained 0.5 per cent to 2,070.65 by the end of Friday’s session, while the Dow Jones Industrial Average rose 0.2 per cent to 17,804.80, and the Nasdaq Composite climbed 0.4 per cent to 4,765.38.



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