The stock markets in the United States declined again as investors are becoming more concern regarding the escalating insurgency in the Middle East. The situation minimized the attention of investors on data showing that the U.S. economy is growing.
The Department of Commerce reported that the number of purchases of new homes in the country climbed the most last month over the past 22 years. According to the agency, the sales for new single-family homes in May increased 19.6% to 504,000 at a seasonally adjusted rate from 431,000 in the same period a year earlier.
The median sales price of new houses sold last month was $282,000, and the average sales price was $319,200.
Today, Charles Plosser, president of the Federal Reserve Bank of Philadelphia stated that he is “fairly optimistic” that the economy will grow more than 2.4% for the remainder of 2014 and next year amid the steady improvement of the labor market. He predicted that consumption will probably increase as household income improves, and the unemployment rate might decline to 5.8% by the end of the year.
Plosser said, “The rebound after the bad winter seems to be progressing, the outlook for unemployment is a bit better, and the inflation rate appears to be firming. Current data suggest economic strength is fairly broad-based.”
Meanwhile, U.S. Secretary of State John Kerry was in Iraq in an effort to encourage Iraqi leaders to unite against the ISIL militants who already gained control of some areas of their country. Iraq is the second largest oil producer under the OPEC.
Commenting on the situation, Stephen Carl, principal and head equity trader at Williams Capital Group LP told Bloomberg, “It’s the situation with any geopolitical scenario over in the Middle East. It’s tenuous; you don’t know which way it’s going to go, and any abrupt action is going to be a trigger. We’ll see what kind of concrete news comes out of it and whether it stabilizes or continues. Besides this morning’s econ data that’s the only mover.”
- Dow Jones Industrial Average (DJIA)- 16,818.13 (-119.13 points)
- S&P 500- 1,949.98 (-12.63 points)
- NASDAQ- 4,350.36 (-18.32 points)
- Russell 2000- 1,173.18 (-11.77 points)
- EURO STOXX 50 Price EUR- 3,284.81 (+0.07%)
- FTSE 100 Index- 6,787.07 (-0.20%)
- Deutsche Borse AG German Stock Index DAX- 9,938.08 (+0.17%)
- Nikkei 225- 15,376.24 (+0.05%)
- Hong Kong Hang Seng Index- 23,880.64 (+0.33%)
- Shanghai Shenzhen CSI 300 Index- 2,144.82 (+0.50%)
Stocks in Focus
The stock price of Elizabeth Arden, Inc. (NASDAQ:RDEN) dropped more than 3% to $27.41 per share after company announced that it would eliminate jobs and shut down its Puerto Rico affiliate under its restructuring program. The maker of Elizabeth Taylor and Britney Spears perfume did not say how many employees will be terminated.
The shares of Micron Technology, Inc. (NASDAQ:MU) increase almost 4% to $32.50 per share after the company reported third quarter earnings the beat the consensus estimate of Wall Street analysts. The memory chip maker posted earnings of $0.68 per share on $3.98 billion revenue. Micron Technology’ earnings in the same period a year ago was $0.04 per share.
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) gained more than 40% to $93.53 per share driven by a report that a combination of two of its drugs significantly improved the lung function of patients inflicted with the most common type of cystic fibrosis.