>>> Golden Goose, Piazza Italia among Italian fashion groups mulling listings (t

Golden Goose, Piazza Italia among Italian fashion groups mulling listings

Golden Goose, the privately held Italian sports shoe manufacturer, is considering a listing on the Italian Stock Exchange, Italian-language daily MF Fashion reported.

The report cited as evidence Golden Goose's signing up to the Italian Stock Exchange's Elite programme, designed to prepare companies for listing.

The report said that four other Italian fashion companies had signed up to the Elite programme -- Antony Morato, Coswell, Piazza Italia and Pelletterie Bianchi e Nardi.

The report added that Golden Goose has turnover of EUR 29.7m and a profit of EUR 4.9m; Piazza Italia has turnover of EUR 334.8m and a profit of EUR 9m; Coswell turnover of EUR 89.7m and a profit of EUR 1m; Antony Morato has turnover of EUR 76.3m and a profit of EUR 3m and Pelletterie Bianchi e Nardi turnover of EUR 27.3m and a profit of EUR 2m.


Source MF Fashion

>>> Evry sees interest from Apollo - report (translated)

Evry sees interest from Apollo - report (translated)
Story
Evry, the Norwegian IT company, has attracted the interest of American PE firm Apollo, according to Dagens Naeringsliv.

The Norwegian business daily reported that newswire reports have already pointed to Finnish IT company Tieto and the international PE firm Apax as bidders for Evry but unnamed sources have now also named Apollo as a bidder. Apollo's European PR advisor, Maitland, declined to comment on the matter via an e-mail to the paper.

Sources told the paper that PE firm Advent was also said to be interested in Evry earlier in the process, but later withdrew.

The paper reported further that the sale of Evry has reached its final stages and may be concluded before the end of the year. Meanwhile, Evry's spokesperson Geir Remman did not wish to comment on the report.


Source Dagens Naeringsliv

FT Lex : Hugo Boss: the rational consumer

Hugo Boss: the rational consumer
Another piece of bad news from the luxury clothing maker
Hugo Boss is a case study in stock market irrationality. Reasons to avoid shares in the luxury clothes maker abound: a year ago, it pushed back one of its profitability targets and since then earnings forecasts have been falling; it generates 63 per cent of its sales in the economic disaster zone that is Europe; the shares, at an average of about 18 times forecast earnings this year, are not particularly cheap; and Permira, the largest shareholder with a 39 per cent stake, has been reducing its holding. So what has happened to the shares? Before Tuesday they were up 9 per cent in a year, outperforming the Dow Jones Global Luxury index by 21 percentage points.

But its ability to defy gravity may be limited. The shares fell 5 per cent on Tuesday as the company had more bad news to report. Revenue guidance for 2014 fell from “high single-digits” to 6-8 per cent. Profit guidance dropped a little more. The end of the third quarter was not good, with tourist numbers falling and warm weather leaving stock on shelves – who is going to buy an €80 scarf when it feels like summer?
Put in the context of other luxury companies, though, Hugo Boss has its attractions. Although heavy exposure to Europe is worrying, heavy exposure to China (with its recent disdain for conspicuous consumption) would be even more worrying. Hugo Boss generates just an eighth of its sales from the Asia-Pacific region, and the businesses outside China are doing nicely. A global shift from wholesale to retail also looks smart. Same-store sales growth in the retail business is running at a respectable 4 per cent. Add all that together, and even after the downgrade Hugo Boss is still growing faster than many of its rivals.
That should give some support to the shares. But the European Commission has just cut its economic outlook for the eurozone. Permira sold an 11 per cent stake in September. November downgrades are starting to be a habit. There is no reason, rationally, to expect the shares to have a big jump.

FT Lex : SoftBank: look on my works, ye mighty

SoftBank: look on my works, ye mighty
All this complexity deserves a discount
Not every person can boast a 12-hour battery life and an ability to read emotions. So there must be a place in life for Pepper – a humanoid robot with both attributes. It is a creation of one of the 1,300 subsidiaries of Japan’s SoftBank, an internet-era zaibatsu. Pepper may one day try to charm customers of another SoftBank asset, Sprint. Last year the US phone carrier – SoftBank owns four-fifths – tried for a merger with T-Mobile USA to create a third big US wireless carrier. It failed.
Sprint has been losing customers this year, despite threatening a price war against its rivals. In the third quarter it lost half a million contract subscribers year on year, and a billion dollars from its profit forecast for 2014 (to $6bn). Reverberations from Monday’s late report reached Tokyo – SoftBank cut its own operating profit forecast for the fiscal year ending in March by 10 per cent – before returning to hit Sprint’s stock on Tuesday. It fell a fifth, a big move for a (now) $20bn company.

Pepper, emotionally-attuned fellow that he is, may not feel very valued, given Softbank’s share price. SoftBank has a market capitalisation near $85bn. Behind this valuation – and under its founder Masayoshi Son’s three-centuries-long plan for his company – SoftBank has, in addition to $16bn worth of Sprint shares, a stake in Yahoo Japan worth more than $7bn, and a third of Alibaba’s shares with a market value of $80bn, and net cash on its balance sheet.
Even after accounting for capital gains taxes on any future sale of the Alibaba stake, and a conglomerate discount, it looks like the market is placing little value on the core Japanese telecom business. Does that make the shares cheap?
A precedent. Naspers, the South African media empire, has a $51bn market capitalisation. It has stakes in Tencent and Mail.ru which it values at $55bn. This implies that shareholders get print and pay-TV businesses, plus a string of investments in ecommerce sites across emerging markets, free.
But these latter assets are made of cheap pixels. SoftBank is also snapping up stakes in Asian internet properties but it operates in telecoms – in which capital spending on networks can be relentless and cross-border synergies few. Sprint for its part plans cost-cuts of $1.5bn for its turnround. All this complexity deserves a discount. Unless, that is, Pepper is a dab hand at valuation multiples too.

>>> What to look at today - 5th of November 2014

US Market LCosed higher for the Dow but Lower for the S&P, European Commission lowered its GDP forecasts for the region, also a report from Reuters has revealed a potential power struggle at the European Central Bank. According to the report, ECB board members have been unhappy with President Mario Draghi effectively making some policy decisions on his own. Furthermore, the report claimed that up to ten out of 24 ECB members are not in favor of a sovereign QE program...weakness in energy kept the market under pressure while other cyclical groups were mixed. Financials (+0.1%), industrials (+0.1%), and technology (unch) displayed relative strength while consumer discretionary (-1.3%) and materials (-1.0%) lagged. ..Volume were above average @ 810mil sh....VIX @ 14.89 +1.09%...After Hours JIVE +21.4%, MPO +21.1%, COUP +20.4%, FEYE -20.4%, ZAGG -18.4%, ZU -15.7%, TRIP -11.9% following earnings/guidance...Republican party scored a resounding victory in the race to control the US senate, as GOP candidates avoided setbacks in all of the key battleground states. China HSBC Services and Hong Kong Manufacturing rounded out the regional PMI announcement period, with more disappointing prints out of the Far East. Chinamservices PMI hit a 3-month low, as HSBC economist said further easing measures in the coming months are justifiable to help offset the downward pressures on the economy. Out of Hong Kong, a 3rd month of contraction to the lowest level...BOJ Gov Kuroda spoke in Tokyo, largely reiterating sentiment from the most recent policy statement / press conference. Kuroda said easing would continue
until inflation target was stable, QQE is having its desired effects, household spending would gradually pick up, and capex would also recover. Note earlier Nikkei report citing Japan Center for Economic Research (JCER) saw Sept GDP falling 0.3% m/m - the first decline in 5 months - accentuated by a 0.8% drop in housing investment...Nikkei +0.44% Hang Seng-0.59% ...Shanghai -0.28%

Eur$ 1.2532 S&P +0.40% EuroStoxx +1.07% FTSE +0.68% DAX +0.96% SMI +0.66%

Macro
- HSBC China Oct. Services PMI 52.9 vs 53.5 in Sept.
- Markit/JMMA Japan Oct. Composite PMI 49.5 vs 52.8 in Sept.

Keep an eye on :
- ALO FP : Macron Authorizes General Electric Investment in Alstom
- ALO FP : Alstom 1H Orders Double; Sales Growth Above 5% in Medium Term, Operating Margin to Improve Within 5%-7% Range
- BMPS IM : Paschi Said Close to Underwriting for EU2.5 Billion Share Sale
- BMPS IM : Banca Monte Paschi Said to Win $3.1B Capital Commitments: WSJ
- BNR GY : Brenntag 3Q Operating Ebitda In Line; Confirms 2014 Forecast
- CNP FP : CNP Assurances Posted 9-Month Net Income of EU842 Million
- CNP FP : Groupama Is Studying CNP Scenarios, Les Echos Says
- CRTO US : Criteo Raises 2014 Targets for Adj. Ebitda, Rev.
- DEC FP : JCDecaux CFO Debroux to Resign, to Be Replaced by Bourg
- DIA SM : DIA to Buy Up to 160 Supermarkets Under Eroski, Caprabo Brands
- ENE SM : Enel Said to Plan EU3b Sale of Stake in Spain’s Endesa This Week
- EVRY NO : Tieto, Apax and Apollo Vie for Evry, Dagens Naeringsliv Says
- GBB FP : Bourbon 3Q Revenue EU351.3m; Avg. Utilization Rate 79.4%
- HEIA NA : Heineken Says Debroux to Succeed Hooft Graafland as CFO
- INGA NA : ING Bank 3Q Net EU928m, Est. EU1.08b; to Repay Aid by Nov. 7,
- KGX GY : Kion 3Q Sales Rise 5%, Ebit Down 22%; Confirms 2014 Forecast
- KBC GY : Kontron 3Q Order Intake Up 49%, Posts Ebit Loss; Confirms Goals
- KU2 GY : Kuka 3Q Ebit Rises, Confirms 2014 Forecast
- LG FP : Lafarge 3Q Sales, Ebitda In Line, Repeats Market Growth Forecast
- LUPE SS : Lundin Petroleum 3Q Ebitda Beats Est.; Keeps 2015 Prod. Forecast
- KN FP : Natixis 3Q Net Profit EU281 Mln; Est. EU275 Mln
- ORP FP : Orpea Says It’s Studying Acquisitions in Germany, Switzerland
- PTC PL : Apax Said to Prepare EU7b Bid for Oi Portugal Assets
- PTC PL : CMVM Bans Portugal Telecom Short Selling Through Nov. 5
- PYT AV : Polytec Holding 3Q Group Ebit Up 25% to EU4.5m
- ROG VX : Roche to Invest CHF450m in New China Diagnostic Facility
- SPM IM : Eni Seen Working With Credit Suisse on Saipem Stake Sale:Reuters
- TKA AV : Telekom Austria Eyes European Acquisitions, Handelsblatt Says
- TLW LN : Tullow Ghana Halts Gas Flaring at Jubilee as Permit Expires
- UCG IM : UniCredit Says Capital Buffer Higher Than Test Showed: Reuters

>>> Brokers Upgrades & Downgrades - 5th of November 2014

>>> Up
*AB FOODS RAISED TO BUY VS NEUTRAL AT CITI
*PKN ORLEN RAISED TO BUY VS HOLD AT SOCGEN
*SENIOR RAISED TO BUY AT CANACCORD GENUITY
*SHIRE ADDED TO GOLDMAN CONVICTION BUY LIST; WAS NOT RATED

>>> Down
*AFREN CUT TO NEUTRAL AT MACQUARIE
*BINCKBANK CUT TO HOLD VS BUY AT ING
*BPOST CUT TO HOLD VS BUY AT ING
*PZU CUT TO SELL VS NEUTRAL AT GOLDMAN
*RHOEN-KLINIKUM CUT TO HOLD VS BUY AT BERENBERG
*RHOEN-KLINIKUM CUT TO HOLD VS ACCUMULATE AT EQUINET
*TDC CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*TT ELECTRONICS CUT TO HOLD VS BUY AT BERENBERG

>>> PT Changes


>>> Initiation
*AB INBEV RATED NEW BUY AT BERENBERG, PT EU92.87
*BOOHOO RATED NEW BUY AT PEEL HUNT; PT 67P
*C&C GROUP RATED NEW HOLD AT BERENBERG, PT EU3.67
*CARLSBERG RATED NEW SELL AT BERENBERG, PT DKK471.84
*HEINEKEN RATED NEW HOLD AT BERENBERG, PT EU57.68
*JOHNSTON PRESS RATED NEW BUY AT PEEL HUNT; PT 6P
*SABMILLER RATED NEW BUY AT BERENBERG, PT 3,850P

>>> Call
>> Stock
*SHIRE ADDED TO GOLDMAN CONVICTION BUY LIST; WAS NOT RATED
*NOVO NORDISK EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY

(BFW) Apax Said to Prepare EU7b Bid for Oi Portugal Assets

Apax Said to Prepare EU7b Bid for Oi Portugal Assets
2014-11-04 23:02:23.140 GMT


By Jim Silver
Nov. 4 (Bloomberg) -- Apax Partners planning offer for Oi’s
assets in Portugal in partnership with CVC, Bain, person with
direct knowledge of the matter tells Bloomberg’s Cristiane
Lucchesi and Christiana Sciaudone.
* Apax is looking at the co.’s numbers in detail with aim to
match a proposal made by billionaire Patrick Drahi on Nov.
2, the person said
* The funds are betting the Portuguese govt would be in favor
of them, the person said
* The firms are considering raising debt to help finance the
transaction, the person said
* Oi, Brazil’s largest landline carrier, will wait to get more
offers for its Portuguese assets before deciding what to do,
another three people said
* Spokesmen for Apax, CVC, Bain declined to comment

Link to full story: NSN NEJDZW6TTE04<GO>

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Jim Silver in New York at +1-212-617-7342 or
jsilver@bloomberg.net
To contact the editors responsible for this story:
Andrea Snyder at +1-202-624-1831 or
asnyder5@bloomberg.net
Vivek Shankar

>>> Asian Update

Asian Market Update: GOP takes the US Senate; Occupy Central sends Hong Kong PMI deeper into contraction

***Economic Data*** - (CN) CHINA OCT HSBC SERVICES PMI: 52.9 V 53.5 PRIOR; Composite PMI: 51.7 v 52.3 prior - (HK) HONG KONG OCT HSBC PMI: 47.7 V 49.8 PRIOR (37-month low; 3rd month of contraction) - (JP) JAPAN SEPT LABOR CASH EARNINGS Y/Y: 0.8% V 0.8%E (7TH CONSECUTIVE INCREASE, 3-month low) - (JP) JAPAN OCT MONETARY BASE Y/Y: 36.9% V 35.3% PRIOR; MONETARY BASE END OF PERIOD: ¥259.5T (record high) V ¥252.6T PRIOR - (AU) AUSTRALIA OCT AIG PERFORMANCE OF SERVICES INDEX: 43.6 V 45.4 PRIOR (14-month low) - (NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 5.4% (5-year low) V 5.5%E; EMPLOYMENT CHANGE Q/Q: 0.8% V 0.6%E; Y/Y: 3.2% V 3.0%E - (NZ) NEW ZEALAND Q3 AVERAGE HOURLY EARNINGS Q/Q: 1.4% V 1.1%E; PRIVATE WAGES EX-OVERTIME Q/Q: 0.5% V 0.5%E; PRIVATE WAGES INCL OVERTIME Q/Q: 0.5% V 0.5%E - (UK) UK OCT BRC SHOP PRICE INDEX Y/Y: -1.9% V -1.7%E (18TH STRAIGHT MONTHLY DECLINE)

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.2%, S&P/ASX -0.3%, Kospi +0.2%, Shanghai Composite -0.5%, Hang Seng -0.5%, Dec S&P500 +0.3% at 2,011

***Commodities/Fixed Income*** - Dec gold -0.4% at $1,163, Dec crude oil +0.1% at $77.26/brl - (US) API PETROLEUM INVENTORIES: CRUDE: -0.64M (first draw in 5 weeks) v +2Me - GLD: SPDR Gold Trust ETF daily holdings fall 2.4 tonnes to 738.8 tonnes; Lowest level since Sept 2008 - SLV: iShares Silver Trust ETF daily holdings fall to 10,682 tonnes from 10,747 tonnes prior (lowest since Sept 23rd) - (AU) Australia MoF (AOFM) sells A$600M in 4.5% 2033 Bonds; Average yield: 3.7374%; Bid-to-cover: 3.00x - JGB: (JP) Japan MoF sells ¥2.21T in 0.5% (0.5% prior) 10-yr notes; Avg Yield: 0.439% v 0.516% prior; bid-to-cover: 3.50x v 3.48x prior - USD/CNY: (CN) PBoC sets yuan mid point at 6.1503 v 6.1543 prior setting (first strong CNY setting since Oct 28)

***Market Focal Points/Key Themes/FX*** - Republican party scored a resounding victory in the race to control the US senate, as GOP candidates avoided setbacks in all of the key battleground states. North Carolina, Iowa, Georgia, Colorado, and Kansas all tipped in favor of the Republican party, while Louisiana is heading for a run-off in December with expectations for Bill Cassidy to also topple Mary Landrieu (D). Pundits now project the Democrat party Senate count to be reduced to 45-46 seats, and Kentucky's Mitch McConnell would take the helm as the chamber majority leader on the GOP side. Markets generally saw little reaction to the midterm results, with S&P futures receiving a very slight 4-point nudge higher above 2,010.

- China HSBC Services and Hong Kong Manufacturing rounded out the regional PMI announcement period, with more disappointing prints out of the Far East. China services PMI hit a 3-month low, as HSBC economist said further easing measures in the coming months are justifiable to help offset the downward pressures on the economy. Out of Hong Kong, a 3rd month of contraction to the lowest level in 37 months was "widely attributed by panellists to recent political protests, though there had already been signs that growth was slowing in past months." Report added that "new orders received by private sector companies in Hong Kong contracted for the sixth consecutive month in October."

- BOJ Gov Kuroda spoke in Tokyo, largely reiterating sentiment from the most recent policy statement / press conference. Kuroda said easing would continue until inflation target was stable, QQE is having its desired effects, household spending would gradually pick up, and capex would also recover. Note earlier Nikkei report citing Japan Center for Economic Research (JCER) saw Sept GDP falling 0.3% m/m - the first decline in 5 months - accentuated by a 0.8% drop in housing investment.

- Down under, New Zealand Q3 unemployment rate fell to a 5 1/2 year low of 5.4%. NZ Stats added that "due to strong migration, we have had the largest annual rise in the population in 10 years (pushing) employment rate up to 65.2 of every 100 adults being in employment." Australia's CBA posted a solid Q1 update, while Morgan Stanley lowered Aussie 2015 GDP target to 1.9% from 2.5%

- Among USD majors, USD/JPY was up about 50pips around 114, EUR/USD ticked higher by about 20pips above 1.2560, and NZD/USD saw an 80pip jump after employment data to 0.7840 session high. Precious metals continued to sink - Dec gold and Dec silver fell about 0.5% to $1,161 and $15.80 respective lows.

***Equities*** US markets: - COUP: Reports Q3 -$0.01 v -$0.02e, R$58.5M v $39.7M y/y; +19.4% afterhours - EPE: Reports Q3 $0.24 v $0.23e; +4.9% afterhours - ATVI: Reports Q3 $0.23 v $0.12e, R$1.17B v $992Me; +3.8% afterhours - DVN: Reports Q3 $1.34 (adj) v $1.27e, R$5.34B v $4.29Be; +2.0% afterhours - TNET: Reports Q3 $0.28 v $0.26e, R$127.8M v $126Me; +1.9% afterhours - FOXA: Reports Q1 $0.39(adj) v $0.36e, R$7.89B v $6.42Be; +0.8% afterhours

- INTC: Hearing cut at Bernstein to Underperform from Market Perform; -1.2% afterhours - MYGN: Reports Q1 $0.25 v $0.31e, R$168.8M v $174Me; -2.4% afterhours - AWAY: Reports Q3 $0.20 v $0.16e, R$117.1M v $116Me; -7.0% afterhours - CHUY: Reports Q3 $0.19 v $0.20e, R$64.1M v $64.6Me; -8.9% afterhours - JMBA: Reports Q3 -$0.10 v $0.32e, R$58.3M v $59.5Me; -9.0% afterhours - TRIP: Reports Q3 $0.48 v $0.60e, R$354M v $348Me; -11.6% afterhours - ZU: Reports Q3 $0.02 v -$0.02e, R$285.5M v $287Me; -16.1% afterhours - FEYE: Reports Q3 -$0.51 v -$0.56e, R$114.2M v $116Me; -20.3% afterhours

Notable movers by sector: - Consumer Discretionary: Sands China 1928.HK -3.5%, SJM Holdings 880.HK -2.9%, Wynn Macau -2.6% (analyst actions) - Financials: Commonwealth Bank of Australia CBA.AU +0.3% (Q1 results); Beijing Capital Land 2868.HK +1.5% (Oct sales results) - Industrials: Teijin 3401.JP +9.9% (H1 results); Takata Corp 7312.JP +3.2% (comments on airbag recalls); Nissan Motor 7201.JP +0.8% (H1 results); Transfield Services TSE.AU +2.5% (raises FY15 guidance) - Telecom: SoftBank 9984.JP -3.3% (H1 results)

>>> US After Hours

After Hours Summary: JIVE +21.4%, MPO +21.1%, COUP +20.4%, FEYE -20.4%, ZAGG -18.4%, ZU -15.7%, TRIP -11.9% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: JIVE +21.4%, MPO +21.1%, COUP +20.4%, CRTO +14.2%, ADEP +7.1%, NSTG +7%, EXEL +6.1%, PAYC +6%, EOG +5.2%, EPE +4.9%, ATVI +3.7%, OKE +3.6%, DKL +2.8%, EXAM +2.7%, JAZZ +2.6%, DVN +2.3%, CALD +2.2%, XNPT +2.1%, FANG +2.1%, TNET +1.9%, TTGT +1.9%, SBAC +1.7%, FOXA +1.6%, DOX +1.1%, TMH +0.8%, III +0.7%, SN +0.7%, KAR +0.6%, PCYC +0.5%, RLOC +0.5%

Companies trading higher in after hours in reaction to news: ESYS +77.6% (to be acquired by Lindsay Corporation (LNN) for $17.50 per share in cash), XWES +27.7% (to be acquired by EnerNOC (ENOC) for $5.50 per share in cash), ADNC +7.4% (co's voice processor selected for Samsung Gear S Smartwatch, Galaxy Note Edge, Galaxy Note 4 and Galaxy Alpha smartphones), EXEL +6.1% (announced positive top-line from a Phase 2 trial of Cabozantinib and Erlotinib in patients with EGFR wild-type non-small cell lung cancer), SGMS +0.8% (awarded Lotto New Zealand seven-year instant games contract), KAR +0.6% (Board authorized the repurchase of up to $300 mln of common stock over the next two years)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: FEYE -20.4%, ZAGG -18.4%, ZU -15.7%, TRIP -11.9%, JMBA -11.8%, CHUY -10.5%, AWAY -8.4%, OESX -8.3%, ENPH -6.8%, GHDX -6.3%, REXX -6.2%, OAS -6.2%, IRWD -5.8%, SPA -5.6%, UIL -3.8%, AEZS -3.6%, KOPN -3.6%, PXD -3.3%, XEC -3%, IVR -2.9%, MYGN -2.4%, PBPB -1.5%, CERS -1.5%, CLDX -1.1%, EVOL -0.9%, REGI -0.9%, WPX -0.8%, BRP -0.4%, PEGA -0.4%, SQNM -0.3%

Companies trading lower in after hours in reaction to news: ESI -8.6% (co disclosed that JPMorgan issued an irrevocable letter of credit in the amount of ~$79.7 mln; PWC will not stand for reappointment as co's independent registered public accounting firm), LPTN -5.5% (announced that Scott Pancoast has resigned as president, CEO and a member of the Board, effective Nov 3; Board appointed Michael Lack as interim CEO), EGY -5.1% (announced that Well 2-H in the Ebouri field, offshore Gabon, has been temporarily shut-in to determine the cause of pressure communication between the tubing and casing annuli), PXD-3.3% (announced that it has agreed to sell 5.75 mln shares of its common stock in an underwritten public offering; co also reported earnings), BTE -2.0% (co announced that certain of its indirect subsidiaries received a letter from the Canada Revenue Agency regarding potential denial of non-capital loss deductions for years 2011-2013), MIC -2.0% (announced secondary public offering of ~1.3 mln LLC interests), Q -1.9% (announced the launch of an underwritten, secondary public offering of 13,303,666 shares of its common stock by certain of its existing shareholders), LNKD -1.9% (announced a $1.15 bln convertible notes offering)

>>> US Close Dow+0,10% S&P-0,28% Nasdaq-0,33% Russell-0,41%

Closing Market Summary: Growth Concerns Pressure Cyclical Sectors

The major averages ended the Tuesday session on a mixed note. The Dow Jones Industrial Average (+0.1%) spent the bulk of the day near its flat line while the S&P 500 settled lower by 0.3%.

Stocks were pressured from the start, but the early weakness could be traced back to Europe where the European Commission lowered its GDP forecast for the region. The commission now expects 2014 GDP to grow at 0.8% (prior 1.2%) while the forecast for 2015 was lowered to 1.1% from 1.7%.

Also in Europe, a report from Reuters has revealed a potential power struggle at the European Central Bank. According to the report, ECB board members have been unhappy with President Mario Draghi effectively making some policy decisions on his own. Furthermore, the report claimed that up to ten out of 24 ECB members are not in favor of a sovereign QE program.

In all likelihood, the news of strong opposition to quantitative easing is why the euro climbed following the report. The single currency advanced to 1.2550 against the greenback, which contributed to a 0.4% decline in the Dollar Index (87.05, -0.25).

The downtick in the dollar did little to prevent crude oil from falling in response to the lowered growth outlook for the eurozone and lower export prices from Saudi Arabia. The energy component fell 2.0% to $77.13/bbl. For its part, the energy sector (-1.9%) spent the entire session at the bottom of the leaderboard.

The significant weakness in energy kept the market under pressure while other cyclical groups were mixed. Financials (+0.1%), industrials (+0.1%), and technology (unch) displayed relative strength while consumer discretionary (-1.3%) and materials (-1.0%) lagged.

Notably, the discretionary sector suffered from weakness among apparel names after Michael Kors (KORS 71.42, -6.57) issued disappointing comparable store sales guidance, which masked better than expected results. The stock tumbled 8.4%. Foot Locker (FL 53.63, -2.54) also weighed, falling 4.5% after announcing CEO Ken Hicks will be replaced by Richard Johnson. Homebuilders also pressured the sector with the iShares Dow Jones US Home Construction ETF (ITB 23.92, -0.26) ending lower by 1.1%.

Elsewhere, the industrial sector ended ahead of other cyclical groups thanks to gains among transport stocks. The Dow Jones Transportation Average added 0.4% with airlines leading the way after Delta Air Lines (DAL 42.32, +1.71) reported strong October metrics. However, the sector could not pull away from its flat line as growth concerns weighed on machinery stocks like Caterpillar (CAT 98.61, -1.61) and Joy Global (JOY 52.00, -0.31).

On the upside, the consumer staples sector (+0.5%) ended in the lead with help from upbeat earnings reported by Archer-Daniels Midland (ADM 49.54, +2.29). The health care sector (+0.1%) also finished in the green while telecom services (-0.2%) and utilities (-0.6%) registered losses.

Treasuries held intraday gains, but the 10-yr note returned to unchanged by the end of the session (2.33%). The long bond, meanwhile, ended in the green to lower its yield two basis points to 3.05%.

Participation was ahead of average with roughly 810 million shares changing hands at the NYSE floor.

Economic data was limited to the trade deficit and factory orders:
  • The September trade deficit widened to $43.00 billion from a downwardly revised $40.00 billion (from $40.10 billion) while the consensus expected the deficit to come in at $40.20 billion 
    • According to the advance estimate of Q3 2014 GDP, the BEA assumed that the trade deficit narrowed to roughly $38 billion in September. The upward surprise should result in a downward revision to third quarter GDP in the second estimate 
    • The goods deficit increased by $2.40 billion in September to $62.70 billion while the services surplus fell to $19.60 billion from $20.20 billion 
  • Manufacturing orders declined 0.6% in September after falling an upwardly revised 10.0% (from -10.1%), while the consensus expected a decline of 0.5% 
    • Durable orders fell 1.1% in September after declining 18.3% in August. That was a slightly stronger result than the 1.3% decline reported in the advance durable goods report 
    • Much of the decline in durable goods demand resulted from a 14.7% decline in aircraft orders. Excluding transportation, durable goods orders slipped 0.1% in September
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the October ADP Employment Change report (consensus 220K) will cross the wires at 8:15 ET. The day's data will be topped off with the 10:00 ET release of the ISM Services Index for October (consensus 58.0).
  • Nasdaq Composite +10.7% YTD 
  • S&P 500 +8.9% YTD 
  • Dow Jones Industrial Average +4.9% YTD 
  • Russell 2000 +0.1% YTD