The stock markets in the United Stated ended the trading this week with losses amid increasing concerns regarding the global economic growth. The Asian and European stock markets also dropped today.
The NASDAQ was down 2.33%, and it is poised to its worst week in two years. The index was negatively impacted by the decline of the equities of technology companies particularly the chipmakers.
JJ Kinahan, chief strategist at TD Ameritrade Holding Corp. (NYSE:AMTD) told CNBC, “Exhaustion has almost set into the market. The volume is getting lower because people don’t know what to do.”
Kinahan added, “With the Fed going away, and the slowdown in Europe, the market is trying to figure out are these valuations fair, that’s what this whole week has been about.”
[drizzle]According to Bloomberg, the value of global equities fell $3.5 billion since reaching a record in September. The Federal Reserve warned that the economic slowdown in Europe poses risk to the U.S. economy. The IMF recently reduced its global growth outlook to 3.8% from 4%.
Alessandro Bee, a strategist at Bank J Safra Sarasin AG commented, “Risks to global growth are at the center of all concerns right now. Investors are paying more attention to what is going on outside America, because if a slowdown in the global economy drags the U.S. economy down, that really does not bode well for equities.”
- Dow Jones Industrial Average (DJIA)- 16,544.10 (-0.69%)
- S&P 500- 1,906.15 (-1.14%)
- NASDAQ- 4,276.24 (-2.33%)
- Russell 2000- 1,055.27 (-1.19%)
- EURO STOXX 50 Price EUR- 2,991.50 (-1.67%)
- FTSE 100 Index- 6,339.97 (-1.43%)
- Deutsche Borse AG German Stock Index DAX- 8,788.81 (-2.40%)
- Nikkei 225- 15,300.55 (-1.15%)
- Hong Kong Hang Seng Index- 23,088.54 (-1.90%)
- Shanghai Shenzhen CSI 300 Index- 2,466.79 (-0.61%)
Stocks in Focus
The stock price of Microchip Technology Inc. (NASDAQ:MCHP) plummeted more than 12% to $39.96 per share after the company reduced its sales outlook to $546.2 million. The company previously estimated that it would be able to achieve net sales in the range of $560 million to $575.9 million.
Microchip CEO Steve Sanghi explained that the company’s sales performance was disappointing last month. He also warned that “another industry correction has begun.”
The shares of Juniper Networks, Inc. (NYSE:JNPR) dropped more than 9% to $19.04 per share after releasing its lower-than expected preliminary results for the third-quarter.
The company now expects its revenue to be in the range of $1.11 billion to $1.12 billion and non-GAAP net earnings of around $0.34 to $0.36 per share. Juniper Networks previously estimated to deliver up around $1.15 billion to $1.2 billion in revenue and non-GAAP earnings in the range of $0.35 to $0.40 per share.
Intel Corporation (NASDAQ:INTC) declined 5% to $31.91 per share while and Cisco Systems, Inc. (NASDAQ:CSCO) fell more than 3% to $23.34 per share. Both companies were impacted by the industry warning from Microchip CEO.