Secretary of State John Kerry warned the U.S. will impose sanctions if "Russian elements" continue to sabotage the democratic process in Ukraine. Kerry's warning to Russian industries came after Russian leaders called to postpone elections scheduled for May 25. The trading mood in Europe and Asia has been somber with the new escalation in the background. Most major markets are in decline after more weakness with tech stocks in the U.S. following last night's bell caught the attention of global traders. Also, lowered expectations of fresh stimulus from the Bank of Japan have weighed on sentiment. The Nikkei closed down 2.9% to a three-week low.
Gold consumption in China is on the rise, according to data from the China Gold Association. Jewelry purchases increased 30% to 232.53 metric tons in the first quarter. Despite the increase in consumption, demand for bars fell 44% to 67.95 tons as investors lightened up. Gold production rose 7.3% during the period. Analysts forecast 2014 could be the first year since 2002 that demand for gold in China doesn't increase.
Japanese automakers had another good month in China during April with sales growing at a double-digit clip. Toyota (NYSE:TM) reported sales increased 12% to 85,800 vehicles, while Nissan (OTCPK:NSANY) saw 15% growth to 118,500 vehicles sold. Honda (NYSE:HMC) reports later this week with a double-digit sales gain forecast. New models designed specifically for Chinese consumers have helped to stoke the consistent sales gains in China this year for the Japanese automakers.
Sears Holdings is expected to announce more store closings as Eddie Lampert looks to execute on an ongoing initiative to cut losses. The retail sector has been overrun with store closing announcements following a tough winter for mall traffic. A plan announced yesterday by Office Depot (NYSE:ODP) to slash 400 stores gave its shares a well-needed 15.8% jolt. Sears (NASDAQ:SHLD) says it will also look to act more like a landlord by leasing store space to retailers striving to increase their footprint.
JetBlue could see a change at the top after CEO Dave Barger's contract expires in 2015. Though the executive hasn't finalized a decision on whether or not he will stay on, JetBlue's (NASDAQ:JBLU) board has already started succession planning discussions. The C-suite at JetBlue has already been rattled this year with the departure of COO Rob Maruster and the naming of new leaders for operations and planning.
Speed is one of the top priorities at Target (NYSE:TGT), according to interim CEO John Mulligan. The executive wants to see the company become more nimble as part of its post-data breach strategy by adding more pilot programs and experimentation in stores. High-profile store sections are already being reworked as the company looks for a way to turn around soft sales trends in the U.S.
Caesars Entertainment plans to sell a 5% stake in Caesars Entertainment Operating Co. in a move that will reduce the amount of debt it guarantees. The development could also set up Caesars Entertainment (NASDAQ:CZR) to restructure itself, although some debt holders are expected to mount a formidable legal challenge.
Alibaba filed for an IPO in the U.S. which is expected to be one of the largest in history. Forecasts on valuation range as high as $245B for the company that earns more revenue than Amazon and eBay combined. Last year, Alibaba handled about $248B in transactions. Yahoo (YHOO) has a 22.6% piece of the Alibaba pie, while SoftBank (OTCPK:SFTBF) holds 34.4%. When Alibaba debuts later this year, it will become the largest Chinese corporation to trade in the U.S.
Disney powered past estimates in FQ2 with the help of a couple of hit movies. Frozen and Thor: The Dark World helped the company's Studio Entertainment segment increase revenue 35% to $1.80B. The films' success also carried over into consumer products sales. During the media giant's earnings call, CFO Jay Rasulo revealed that nine of the ten best-selling items at Disney's retail stores were related to Frozen. Disney's (NYSE:DIS) Media Networks segment saw steady growth during the quarter with ESPN, the Disney Channels, and A&E Television Network all contributing. Higher guest spending boosted results at Disney's theme parks.
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In Asia, Japan -2.9% to 14,033. Hong Kong -1.05% to 21,746. China -0.9% at 2010. India -0.6% to 22383.
In Europe, at midday, London -0.2% to 6,775. Paris -0.2% at 4,417. Frankfurt -0.1% at 9,459.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.8% to $100.26. Gold +0.3% at $1313.
Ten-year Treasury Yield -3 bps to 2.58%.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Productivity and Costs
8:30 Gallup U.S. Job Creation Index
10:00 Janet Yellen speech
10:30 EIA Petroleum Inventories
11:00 Global Composite PMI
11:00 Global Services PMI
1:00 PM Results of $24B, 10-Year Note Auction
3:00 PM Consumer Credit
Notable earnings before today's open: AGN, ALE, AOL, ARIA, ARQL, ATRO, AVA, AYR, BAM, BUD, CHK, CLH, COT, CTSH, DUK, DVN, DWSN, DX, EE, ENB, END, FWLT, GTIV, GWPH, HNT, HTZ, HUM, INXN, KELYA, KING, LAMR, LGND, LINC, LMIA, MDLZ, MEMP, MZOR, NAVB, NJR, NTLS, NVDQ, POM, PRGO, QRE, RIGL, ROC, SBGI, SE, SEP, SFUN, SNSS, SPAR, SPB, STRA, SUSP, SUSS, TAP, THI, TLM, TMHC, TPC, TRGT, USAC, VOYA, VSI, WBAI, WPX, WRES, XEC
Notable earnings after today's close: ACAS, ANAC, ANDE, APU, AR, ASYS, ATLS, ATO, AVG, AWK, BALT, BKD, BODY, BREW, BRKR, CAR, CDE, CDXS, CF, CLR, CODI, COUP, CSLT, CTL, CTRP, CXW, CZR, DCTH, DK, DYN, ERII, ESS, EXPD, FANG, FMI, FNV, FURX, GEOS, GMCR, GPOR, GTAT, GTY, HAIN, HK, HNSN, IL, IPAR, KGC, KIM, KND, KW, LCI, LGP, LHCG, LPSN, LXU, MCP, MDR, MHLD, MIDD, MKL, MM, MRIN, MWE, NKTR, NLY, NRP, NSTG, NVAX, NVEC, NVTL, OSUR, PAA, PGTI, PHH, PL, PMT, PNNT, PODD, POWR, PRU, QEP, QTM, RATE, REG, RIG, RNDY, RST, SCMP, SCTY, SD, SFM, SN, SWM, TCAP, TGB, TGI, TROX, TSLA, TWO, TWTC, TXTR, UGI, UIL, UNM, WGL, WR, WTR, XOMA, Z.
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