News from AAP

US stocks sag but remain close to record

Print This Post A A A

Wall Street stocks have fallen modestly but remain close to record highs to close out the best single-month performance since 2011.

Stocks got help from a new estimate of fourth-quarter US economic growth that came in better than expected.

Despite shedding 6.24 points (0.30 per cent) for Friday, the broad based S&P 500 scored its best month since October 2011, putting on 5.5 per cent, to end at 2,104.50.

The Dow Jones Industrial Average lost 81.72 points (0.45 per cent) at 18,132.70. And the tech-rich Nasdaq Composite Index fell 24.36 (0.49 per cent) to 4,963.53.

The official estimate of US growth in the October-December quarter was revised to 2.2 per cent from the initial estimate of 2.6 per cent.

A sharper cut had been expected by markets, and analysts said the figure suggested the economy is growing now at a respectable 3.0 per cent pace or better.

Coca-Cola led gains in blue-chips, jumping 2.0 per cent on the soaring profits of its soon-to-be energy drink partner Monster Beverages.

Monster shares soared 13.1 per cent on a 65 per cent rise in fourth-quarter profit, helped by a 12 per cent gain in sales.

Coke signed a deal last August to purchase a 16.7 per cent share in Monster, and that should close in the coming months. Monster shares have doubled since the deal was announced.

Clothing retailer The Gap surged 3.1 per cent after the board of directors announced a dividend increase and added $US1 billion to its share buyback program.

Gap, the owner of the Banana Republic and Old Navy brands, said its fourth-quarter earnings were up 10 per cent from a year before, and slightly above forecasts.

The company forecast a fall in 2015 full-year earnings per share to $US2.75-$US2.80 compared with $US2.87 in 2014, blaming challenging currency fluctuations and the impact of the three-month long West Coast ports strike that ended on Saturday.

Struggling retailer JC Penney sank 6.8 per cent after surprising shareholders with a $US59 million loss for the crucial year-end quarter. But Penney said sales were up 4.4 per cent from a year earlier.

Herbalife, the embattled direct marketer of nutrition supplements, fell 10.9 per cent after a fourth-quarter report that showed strong profits but lower-than-expected revenues.

Bond prices were marginally lower. The yield on the 10-year US Treasury rose to 2.00 per cent from 1.99 per cent on Thursday, while the 30-year advanced to 2.60 per cent from 2.59 per cent. Bond prices and yields move inversely.