LONDON (ShareCast) - - Stocks rise as bets for taper pushed back
- Limited upside for US equities, says analyst
- Netflix pulls back from record high

Dow Jones: 0.49%
Nasdaq: 0.25%
S&P 500: 0.59%

US stocks registered decent gains on Tuesday amid hopes that the Federal Reserve will delay tapering quantitative easing after the economy added fewer jobs than expected in September.

The news pushed the S&P 500 to another record close of 1,754.67, up 0.6% on the day, while the Dow Jones Industrial Average rose 0.5% to 15,467.66, its best level since September 19th.

However, Analyst Jessica Hinds from Capital Economics said she sees limited upside for US equities from current levels despite potential delays at the Fed.

"What’s more, the S&P 500 has risen a long way since early 2009, with the result that the cyclically-adjusted price/earnings ratio has more than doubled to a level that is well above its long-run average. Profit margins are also stretched and long overdue a cyclical correction. These headwinds should cap the upside for US equities over the next year."

Jobs report misses forecasts

Non-farm payrolls increased by just 148,000 in September, according to the US data this afternoon which was delayed by over two weeks due to the prolonged government shutdown. The consensus forecast was for a much bigger increase of 180,000.

While the unemployment rate fell from 7.3% to 7.2%, the data reinforced speculation that the Fed will refrain from tapering stimulus until next year, given that that the survey was taken before the fiscal stand-off in Washington which is said to have weighed heavily on economic growth.

Analyst Michael Gapen from Barclays said the report was on the “soft side” and that the recent pace of job growth is “unlikely to satisfy [Fed] policymakers”. He said that the data reduces the likelihood of the Fed scaling back of stimulus in the near future, as he pushed back his forecast for the first taper of asset purchases to March 2014, from his previous prediction December 2013.

US Treasuries rallied on the news, rising the most in a month, while the yield on the benchmark 10-year bond dropped to 2.49% its lowest level since July 23rd. Gold prices meanwhile came close to a one-month high with bullion for immediate delivery touching $1,344.85 during the session.

Choppy day for Netflix

Video-streaming company Netflix swung sharply into the red, pulling back after hitting a record high earlier in the session after the company's net income surged 315% to $31.8m, ahead of estimates.

However, the firm dampened sentiment after saying that it will be many years before cable set-top boxes match the internet in terms of streaming volumes, sending shares lower by mid-morning. Meanwhile, reports that billionaire investor Carl Icahn had sold more than half his stake in the company also weighed on the shares after-hours.

Luxury accessories maker Coach fell after revealing that foreign exchange headwinds resulted in a drop in international sales. On a constant currency basis, however, those were up by 9%.

Data storage provider EMC slumped after lowering its full-year guidance for earnings per share and revenues.

United Technologies warned on its full-year sales guidance. As a result of the on-going weakness in military aerospace markets and the slow pace of recovery in Europe, the company now expects full-year sales of approximately $63bn, versus its previous estimate of $64bn.

Tech giant Apple finished slightly lower after unveiling a thinner version of its larger iPad.

Better-than-forecast construction data

Construction spending grew by 0.7% month-on-month in August (consensus: 0.4%). The previous month’s estimate has been revised to show a rise of 1.4%, versus the preliminary estimate of a 0.6% gain.

Weekly retail store chain sales expanded at a 1.4% week-on-week pace, according to ICSC.


S&P 500 - Risers
Whirlpool Corp. (WHR) $146.19 +11.62%
Alcoa Inc. (AA) $9.36 +8.84%
QEP Resources Inc (QEP) $32.90 +5.82%
Forest Laboratories Inc. (FRX) $46.54 +5.03%
Goodyear Tire & Rubber Co. (GT) $22.04 +4.36%
Vulcan Materials Co. (VMC) $54.14 +4.32%
Lennar Corp. Class A (LEN) $36.17 +4.21%
Kimberly-Clark Corp. (KMB) $102.97 +4.19%
Masco Corp. (MAS) $20.50 +4.11%
Vertex Pharmaceuticals Inc. (VRTX) $77.62 +3.99%

S&P 500 - Fallers
Netflix Inc. (NFLX) $322.52 -9.15%
Coach Inc. (COH) $50.10 -7.53%
Zions Bancorporation (ZION) $27.87 -6.66%
Waters Corp. (WAT) $99.83 -6.01%
Pioneer Natural Resources Co. (PXD) $208.51 -5.29%
EMC Corp. (EMC) $24.04 -4.75%
Discover Financial Services (DFS) $51.80 -3.61%
Regions Financial Corp. (RF) $9.68 -3.59%
State Street Corp. (STT) $67.54 -3.25%
Seagate Technology Plc (STX) $49.14 -2.67%

Dow Jones I.A - Risers
Walt Disney Co. (DIS) $69.00 +2.06%
Procter & Gamble Co. (PG) $80.38 +1.79%
Caterpillar Inc. (CAT) $89.17 +1.68%
Wal-Mart Stores Inc. (WMT) $76.32 +1.56%
Johnson & Johnson (JNJ) $92.36 +1.27%
International Business Machines Corp. (IBM) $174.97 +1.22%
E.I. du Pont de Nemours and Co. (DD) $60.17 +1.19%
Verizon Communications Inc. (VZ) $51.14 +1.11%
Pfizer Inc. (PFE) $30.68 +0.92%
Exxon Mobil Corp. (XOM) $87.98 +0.86%

Dow Jones I.A - Fallers
United Technologies Corp. (UTX) $106.13 -1.38%
Cisco Systems Inc. (CSCO) $22.65 -1.22%
JP Morgan Chase & Co. (JPM) $53.62 -1.20%
Microsoft Corp. (MSFT) $34.58 -1.17%
General Electric Co. (GE) $26.02 -0.46%
Goldman Sachs Group Inc. (GS) $159.25 -0.33%
Intel Corp. (INTC) $24.07 -0.27%
Nike Inc. (NKE) $75.96 -0.17%
Merck & Co. Inc. (MRK) $46.47 -0.09%
Travelers Company Inc. (TRV) $86.71 -0.06%

Nasdaq 100 - Risers
Vertex Pharmaceuticals Inc. (VRTX) $77.62 +3.99%
Randgold Resources Ltd. Ads (GOLD) $75.56 +3.93%
Regeneron Pharmaceuticals Inc. (REGN) $304.49 +3.26%
Biogen Idec Inc. (BIIB) $250.60 +3.10%
Discovery Communications Inc. Class A (DISCA) $85.01 +2.66%
Fossil Group Inc (FOSL) $124.21 +2.53%
Mondelez International Inc. (MDLZ) $33.26 +2.37%
Akamai Technologies Inc. (AKAM) $53.39 +2.28%
Amgen Inc. (AMGN) $116.21 +2.26%
Sigma-Aldrich Corp. (SIAL) $85.00 +2.02%

Nasdaq 100 - Fallers
Netflix Inc. (NFLX) $322.52 -9.15%
Seagate Technology Plc (STX) $49.14 -2.67%
Nuance Communications Inc. (NUAN) $16.50 -2.31%
NetApp Inc. (NTAP) $40.71 -2.26%
Facebook Inc. (FB) $52.67 -2.18%
Check Point Software Technologies Ltd. (CHKP) $58.49 -1.98%
Wynn Resorts Ltd. (WYNN) $169.99 -1.81%
Texas Instruments Inc (TXN) $40.28 -1.73%
Baidu Inc. (BIDU) $158.57 -1.64%
Cisco Systems Inc. (CSCO) $22.65 -1.22%

BC

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