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Markets focused on Fed as investors expect small reduction in stimulus

North American markets were subdued Wednesday ahead of a much-anticipated announcement this afternoon from the U.S. Federal Reserve at the end of its two-day policy meeting.The S&P/TSX composite index dipped 24.20 points to 12,809.91. The Canadian dollar fell 0.12 of a cent to 97.01 cents US.The Fed is expected to announce that it will begin to reduce its massive $85-billion-a month bond-buying program, which was launched after the 2008 financial crisis to boost the flailing U.S. economy.The plan was put in place to keep borrowing rates low, resulting in more investors in the markets and fuelling market rallies across the globe.Since May, Fed chairman Ben Bernanke has hinted that the central bank will begin to scale back its stimulus once it has enough data to show that the economy is recovering. The markets are expecting the Fed to announce a $10 billion reduction in monthly bond purchases.What will be most important is the wording that accompanies the announcement, as investors listen to hear whether more hints will be dropped on the pace of future stimulus reductions.Bernanke is set to make an announcement at 2:30 p.m. ET.Bank of Canada Governor Stephen Poloz will give a morning speech in Vancouver, followed by an afternoon news briefing, before the Fed’s announcement.Wall Street was slightly higher as the Dow Jones index jumped dropped 15.06 points to 15,514.67, the Nasdaq was up 4.43 points to 3,750.13 and the S&P 500 climbed 0.57 of a point to 1,705.33.Prior to the Fed speech, the U.S. Commerce Department reported that builders started work in August on the highest number of single-family homes in the last six months and requested permits to build more. The figures suggest housing is a driver of economic growth despite higher mortgage rates.Meanwhile, in corporate news, smartphone maker BlackBerry (TSX:BB) announced that a new phone will hit the markets in the coming weeks. The BlackBerry Z30 comes with a five-inch display, which means it’s about the same size as its competitor, the Samsung Galaxy S4. The company says the phone has a larger battery that will last for up to 25 hours.The Waterloo, Ont., company says the new phone will be available at a number of Canadian carriers, though specific dates haven’t been announced.BlackBerry has been in the midst of major changes with its organization and has a committee considering strategic alternatives, which could include the sale of the company. Its shares rose 1.10 per cent, or 12 cents, to $11 on the Toronto Stock Exchange.The TSX was mixed, as the energy sector came out as the leading advancer with an uptick of 0.18 per cent as the October crude contract gained 47 cents to US$105.89 a barrel.The gold sector was the leading decliner, down by 0.99 per cent, as December bullion fell $12.70 to US$1,296.70 an ounce.The metals and mining sector was up slightly at 0.08 per cent, while December copper was ahead four cents to US$3.27 a pound.Britain’s FTSE 100 rose 0.2 per cent to 6,580.02. Germany’s DAX advanced 0.3 per cent to 8,618.78. France’s CAC-40 gained 0.2 per cent to 4,154.99.In Asia, Japan’s Nikkei 225 rose 1.4 per cent to close at 14,505.36. Australia’s S&P/ASX 200 lost 0.3 per cent to 5,238.10. South Korean markets were closed for a public holiday. Benchmarks in mainland China, India, New Zealand and Singapore rose while the Philippines and Indonesia fell.Hong Kong’s Hang Seng, which gained more than 1,000 points so far this September by Tuesday’s close, fell 0.3 per cent to 23,117.45 as investors booked profits. read more

Strong sales of FisherPrice Monster High lift Mattels 3Q results tops Wall

Strong sales of Fisher-Price, Monster High lift Mattel’s 3Q results, tops Wall Street view by News Staff Posted Oct 16, 2012 6:20 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email NEW YORK, N.Y. – Mattel says that cost cuts and higher revenue from toys including Monster High dolls and Fisher-Price helped send net income up 22 per cent in the third quarter, providing a bit of early holiday cheer for the largest U.S. toy maker.The results topped Wall Street expectations and sent its shares 3 per cent higher in morning trading Tuesday.They also indicate that Mattel is outperforming its rivals so far as it heads into the crucial holiday season, when toy makers can earn up to 40 per cent of annual revenue.CEO Bryan Stockton said the quarter shows the company is “building momentum in the marketplace through share gains and strong shipments across our portfolio of brands and countries.” But he said the company is solidly focused on the holidays.“With the holidays still in front of us, we remain focused on executing our business and driving retail sales in the all-important holiday season,” he said.There was one lump of coal: The stronger dollar and tough competition in the doll aisle was a drag on Barbie, usually one of Mattel’s top performers. Revenue from that brand fell 4 per cent. But Mattel’s other doll brands’ revenue surged, including Monster High, its hit line of monster-inspired dolls, and American Girl dolls.The holidays are expected to be a tough battleground for toy makers, with retailers ordering inventory cautiously. In addition, retailers including Wal-Mart, Kmart and Toys R Us have beefed up layaway and reservation services to encourage shoppers to buy toys early in the season, meaning they might be scarce later on.But Stockton reassured analysts in a call with investors that he was satisfied with inventory levels and early layaway programs.“Our belief is (early layaway) is positive for the toy industry, particularly higher-priced toy items, and may help drive incremental traffic,” he said. “We feel good that inventory levels, both at Mattel and at our retail partners, position us well for success is the holiday season.”Mattel’s net income was $365.9 million, or $1.04 per share, for the period ended Sept. 30. That’s up from $300.8 million, or 86 cents per share, a year ago.Analysts expected 99 cents per share, according to a poll by FactSet.Revenue for the El Segundo, Calif.-based company rose 4 per cent to $2.08 billion, topping Wall Street’s estimate of $2.07 billion.Fisher Price sales increased 6 per cent, while American Girl rose 16 per cent. Sales of Hot Wheels were flat. Mattel reported strong sales of Monster High products, while sales of games tied to the “Cars 2” movie fell.Revenue climbed in North America and abroad, with international results pressured by the stronger dollar.Cost of sales fell 8 per cent during the quarter as the company continued a cost-cutting program and streamlined design and manufacturing processes.Smaller rival Hasbro Inc., which makes Monopoly, Nerf and My Little Pony, reports its results on Monday.Shares rose $1.78, or 5 per cent, to close at $37.20 after rising as high as $37.31 Tuesday, their highest level in more than a decade.___AP Writers Michelle Chapman and Candice Choi contributed to this report. read more