Stocks End Higher After Chinese Rate Cut, ECB Comments
U.S. Market
Stocks rose today after a surprise rate cut in China and dovish comments from the European Central Bank.
In an unexpected move, the People’s Bank of China cut its one-year loan rate by 0.4 percentage points to 5.6%. The cut comes amidst continued worries about slowing Chinese growth.
ECB head Mario Draghi said today that the central bank is prepared to expand its asset purchase program if inflation expectations don’t begin to rise. His comments raised expectations that the bank would be more aggressive in the near future. The euro fell against the dollar while European shares rallied on the news.
At market close the Dow and S&P 500 were each up 0.5% while the Nasdaq was 0.2% higher.
Stocks on the Move
Shares of Gap (GPS) fell over 4% after the firm reported constant currency sales growth of only 1% in the third quarter late Thursday. Inventory dollars per store were down 2% and gross margin was up 20 basis points. Management updated their fiscal 2014 earnings per share range of $2.73 to $2.78 (down from previous guidance of $2.95 to $3.00) as they expect further weakness in sales and expense deleveraging.
Intuit (INTU) reported a good first quarter fiscal 2015 result. On a year-over-year basis, quarterly revenue rose 8% to $672 million. Total paying QuickBooks customers jumped 22% to 1,209,000, while QuickBooks Online subscribers grew 43% to 739,000. The online shift resulted in desktop unit sales slipping 23% to 149,000, which was in line with expectations. Despite the quarterly outperformance, Intuit reaffirmed its full-year guidance. Shares were up 1% at market close.
