Stock markets in the United States ended the week in the red as investors continue to evaluate mixed economic data. Concerns regarding the possibility of the reduction of the $85 billion quantitative easing or bond purchases program of the Federal Reserve served as the primary factor in the decline of the stock markets.
In an interview with Bloomberg, Brian Burrell, analyst at Thornburg Investment Management opined that investors seemed not too excited with the United States right now given the different results of economic data. He said, “People are scrutinizing these data points and trying to get a read on what is going to happen and how the Fed is going to react.”
In July, the housing market started to go up by 5.9% and the industrial production level did not change. The latest retail sales data gained by 0.2% but the consumer confidence level declined to 80 in August due to concerns over increasing interest rates. In addition, the jobless claims declined to its lowest level to 320,000 for the week that ended August 10. The improvements in economic data pushed the bond yields to its highest level over the past two years.
Economists are speculating the Federal Reserve could start tapering its bond buying activities by $10 billion to $75 billion during its meeting on September 17 to 18. High yield stocks declined due to fears of the increase of bond yields. The rates on 10-year Treasury notes increased to 1.84%, its highest level since August 1, 2011.
U.S. Markets
- Dow Jones Industrial Average (DJIA)- 15, 097 (-0.10%)
- S&P 500- 1,657 (-0.25%)
- NASDAQ- 3,605 (-0.03%)
- Russell 2000- 1,026 (-0.07%)
European Markets
- EURO STOXX 50 Price EUR- 2,854 (+0.65%)
- FTSE 100 Index- 6,499 (+0.26%)
- Deutsche Borse AG German Stock Index DAX- 8,391 (+0.19%)
Asia Pacific Markets
- Nikkei 225- 13,650 (-0.75%)
- Hong Kong Hang Seng Index- 22, 517 (-0.10%)
- Shanghai Shenzhen CSI 300 Index- 2,304 (-0.75%)
Stocks In Focus
The stock price of Dell Inc (NASDAQ:DELL) rose as high as $13.85 after the court rejected Carl Icahn’s request to expedite its hearing regarding his lawsuit against the board of the company. The activist investor accused the board of violating its fiduciary duty for accepting the new proposal of Michael Dell and Silver Lake Partners that undervalues the company. The PC maker also posted higher than expected quarter revenue yesterday.
Alcoa Inc (NYSE:AA) declined to as low as $7.95 per share, but managed to regain some value to around $8.10 a share today. The rating for shares of the aluminum giant was downgraded by analysts at Bank of America from underperform to neutral because lower forecast for aluminum prices. The management of Alcoa Inc (NYSE:AA) also announced that it will close or cut its smelting capacity in Brazil and United States.
Verizon Communications Inc (NYSE:VZ) suffered the biggest decline among the telecommunications stocks in the Dow Jones Industrial Average (DJIA) today. The wireless communications carrier declined to as low as $47.33 per share perhaps due to reports that the company decided to postpone its decision to acquire Wind Mobile and Mobilicity. It has been reported that Verizon will wait for the scheduled auctions for the 700 megahertz Canadian airwave on January next year.
The stock price of Aspen Technology, Inc. (NASDAQ:AZPN) surged by more than 8% to as high as $36.54 per share after reporting $83.3 million revenue, higher than $78.8 million revenue consensus estimate of Wall Street analyst. Aspen Technology offers business management software chemical and energy companies.
