Stocks Slip in Early Trading, Time Warner Earnings Edge Past Forecast
U. S. stocks edged lower during early trading session on Wednesday, tracking across-the-board losses in European equities, as simmering concerns over the political uncertainty in Spain and Italy, came back to haunt investors even as sovereign bond yields of those countries climbed, overshadowing ongoing bout of better than expected quarterly results from most S&P 500 companies.
In Spain, Prime minister Marino Rajoy is under pressure to resign after ‘El Pais’ reported that Rajoy had secret bank accounts where he stashed money received as kickbacks from construction companies during the housing boom. In Italy, growing popularity of Silvio Berlusconi is making financial markets jittery. A pre-poll survey showed that Berlusconi is a strong contender in the upcoming general elections after he promised to slash taxes, in case he comes to power, a move seen as a regressive step which can impact Italy’s budget.
On the positive side, German manufacturing orders for December rose 0.8% in January, which surpassed economists’ forecast.
Biogen Idec (NASDAQ: BIIB) shares climbed nearly 5% after the company agreed to acquire Ireland-based Elan’s interest in the multiple sclerosis treatment Tysabri in deal estimated at $3.25 billion in cash along with future contingent payments.
Shares of Expedia Inc. (NASDAQ: EXPE) edged down on Wednesday. The online travel advisor reported better-than-expected revenue for fiscal fourth quarter thanks to higher number of bookings for hotel and air tickets; nevertheless, it earnings failed to meet analysts’ expectation as margins were undermined by rising marketing costs.
Time Warner Inc. (NYSE: TWX) shares jumped nearly 5% in early trading session after the media conglomerate beat earnings expectations as growth in cable network business offset declining business in film, TV, and publishing divisions . The company also raised its quarterly dividend by 11 percent.