By Barbara Kollmeyer, MarketWatch
Greek headlines in spotlight
MADRID (MarketWatch) -- Stocks were struggling in London on
Wednesday, with commodity names such as Tullow Oil PLC leading the
downside, while ARM Holdings PLC surged on its own results.
Investors are also waiting for more news on Greece. The FTSE 100
fell 0.3% to 6,811.54, on the heels of a 0.1% loss for Tuesday.
Shares of Tullow Oil dropped 1.7% after the Africa-focused oil
explorer said Wednesday it swung to a loss for 2014 and would
suspend its dividend. "2014 was a difficult year for our industry
and a challenging one for Tullow, as our results today
demonstrate," Chief Executive Aidan Heavey said in a statement.
Other names in the commodity space were also on the decline,
similar to Tuesday. Heavyweight BG Group PLC dropped 1.4%, and
Royal Dutch Shell PLC (RDSB) (RDSA) fell 1%.
Stocks of mining companies Anglo American PLC and BHP Billiton
PLC were off 2% and 1.5%, respectively.
Broadcaster Sky PLC slid 4%. On Tuesday, the company said it
would retain Premier League Soccer TV rights, but analysts were
fretting about the very high price the company is paying -- up 70%
a game, well above consensus estimates on what they would pay.
"While Sky says it can absorb extra cost to keep consensus
unchanged, this takes away future investment/wiggle room and
highlights unrelenting content-cost pressure," said analysts at
Investec Securities Research, who rate the company "reduce", and
said they are reviewing their forecasts and target prices.
BT Group PLC , meanwhile, was up 2.5%. It won slightly more
games in the Football Premier League auction, but will pay much
less than Sky, said Investec analysts.
A bright spot in London was ARM Holdings (ARMHY), surging 4%
after the British microchip designer, who counts Apple Inc. (AAPL)
as one of its customers, said it swung to a net profit in the
fourth quarter on strong royalty revenue and projected revenue
gains for the first quarter. ARM is also lifting its dividend to
4.5 pence (6.9 cents), pushing up its full 2014 dividend by 23% to
7 pence.
Shares of Reckitt Benckiser Group PLC surged 3.2% as the
consumer-goods company announced a new cost-cutting plan and lifted
its share-buyback program as it reported a rise in full-year
earnings.
The Greek government's bailout program and appeal for fresh aid
are due to be discussed at Wednesday's emergency meeting of
Eurogroup finance ministers. On Tuesday evening, Greece's
government won a confidence vote on its plans in parliament.
On Thursday, investors in London will be on the lookout for the
Bank of England to slash its inflation forecasts to near zero
levels and state the likelihood of inflation falling into negative
territory, said analysts at FXStreet on their website. "Moreover,
the bank is likely to avoid sounding hawkish at a time when most
other central bankers across Europe are reducing interest rates to
record lows," said the analysts.
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