The stock markets in the United Stated traded lower as investors wait for the upcoming economic growth and employment data this week. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond said he does not perceive any sign that the economy is growing faster. He projected that economic growth would be around 2% next year.
Some economists are anticipating that data will show that the economy weakened and employers in the country added fewer jobs than expected in the third quarter. The average forecast of 69 economists polled by Bloomberg showed that U.S. economic growth was 2% on an annual basis compared with the 2.5% economic growth rate in April through June this year. They also projected that 125,000 jobs were added last month, lower than the 148,000 jobs created in September. The Department of Labor is scheduled to release employment data for October on Friday.
In an interview with Bloomberg, Patrick Kaser, managing director and portfolio manager at Brandywine Global Investment Management commented, “A lot of people are nervous by how strong the market has been this year. There is still skepticism about how the economy is really doing and whether these gains are from artificial factors, like the Fed, or from real strength in company results.”
The Federal Reserve maintained its $85 billion bond-buying program last week. Policymakers want to ensure that steady economic growth is present and sustainable before they start reducing the stimulus.
- Dow Jones Industrial Average (DJIA)- 15, 618.22 (-0.13%)
- S&P 500- 1,762.97 (-0.28%)
- NASDAQ- 3,939.86 (+0.88%)
- Russell 2000- 1,104.48 (-1.34%)
- EURO STOXX 50 Price EUR- 3,035.92 (-0.83%)
- FTSE 100 Index- 6,746.84 (-0.25%)
- Deutsche Borse AG German Stock Index DAX- 9,009.11 (-0.31%)
Asia Pacific Markets
- Nikkei 225- 14, 225.37 (+0.17%)
- Hong Kong Hang Seng Index- 23,089.95 (-0.65%)
- Shanghai Shenzhen CSI 300 Index- 2, 383.77 (+0.14%)
Stocks in Focus
The stock price of AOL, Inc. (NYSE:AOL) climbed 8.52% to $42.02 per share after the online media company delivered better-than-expected financial results for the third quarter. AOL said its revenue increased by 6% to $561.3 million, but its net income declined by 90% to $2 million as the company wrote down charges related to its Patch operations. AOL’s pro-forma earnings per share excluding charges was $0.55 compared with the $0.51 average estimate of Wall Street analysts.
Endo Health Solutions Inc (NASDAQ:ENDP) gained nearly 29% to $56.22 per share after the pharmaceutical company agreed to acquire Paladin Labs Inc., a Canadian specialty drugs maker, for $1.5 billion. The maker of painkillers also reported a net income of $40.2 million or $0.33 earnings per share on $715 million revenue. Endo Health expected to deliver a profit in the range of $4.60 to $4.74 per share and $2.75 billion to $2.8 billion revenue for the entire 2013.
On the other hand, Tenet Healthcare Corp (NYSE:THC) declined almost 9% to $44 per share after issuing guidance for the fourth quarter that is lower than expected. The company is expecting to achieve $400 million to $450 million EBITDA due to lower inpatient volumes growth.