The stock markets in the United States continued its downward trend despite the report from the Federal Reserve that the country’s economy expanded last month.

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The Federal Reserve Beige Book indicated that the U.S. economy continued to grow in mid-November until late December. Most of the 12 districts of the Federal Reserve reported modest or moderate pace of growth.

Higher consumer spending and the expansion of manufacturing in most districts boosted the U.S. economic growth. The report also showed that the “credit quality improved a bit further overall “during the period. In addition, the payrolls in different sectors also increased moderately.

Meanwhile, the crude oil production in the United States increased to a record level amid the declining oil prices in the global market.  Data from the Energy Information Administration showed that the U.S. crude supply increased by 9.19 million barrels per day last week.

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The West Texas Intermediate crude closed at $48.48 per barrel while the Brent crude settled at $48.27 a barrel today. The oil prices declined around 60% since June primarily due to the oversupply of oil in the global market.

Michael Hiley, head of energy OTC at LPS Partners commented, “We have oversupply of crude. Production keeps going up. There is not a great correlation between the rig count and production because drilling has gotten more efficient over the last several years.”

Wall Street analysts believed that oil prices will remain under pressure due to the oversupply and they are forecasting that it will go down to as low as $40 per barrel.

Mike Wittner, head of research at Societe Generale said, “The markets are continuing to price in huge oversupply in the first half of 2015. We’re going to go below $40.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA) – 17,427.09 (-1.06%)
  • S&P 500- 2,011.27 (-0.58%)
  • NASDAQ- 4,639.32 (-0.48%)
  • Russell 2000- 1,176.81 (-0.32%)

European Markets

  • EURO STOXX 50 Price EUR- 3,089.67 (-1.41%)
  • FTSE 100 Index- 6,388.46 (-2.35%)
  • Deutsche Borse AG German Stock Index DAX- 9,817.08 (-1.25%)

Asia-Pacific Markets

  • Nikkei 225- 16,795.96 (-1.71%)
  • Hong Kong Hang Seng Index- 24,112.60 (-0.43%)
  • Shanghai Shenzhen CSI 300 Index- 3,502.42 (-0.33%)

Stocks in Focus

BlackBerry surged almost 30% to $12.60 per share in New York today. The stock benefited from a report that Samsung Electronics proposed to take over the Canadian technology company for $7.5 billion to gain access to its patent portfolio.  The proposed acquisition price values BlackBerry’s stock at a range of $13.35 to $15.49 per share.

The stock value of JPMorgan Chase & Co. dropped more than 3% to $56.81 per share after the bank reported that its profit fell 6.6% in the fourth quarter.

The shares of Flamel Technologies declined more than 37% to $11.50 per share. The company suffered the biggest losses on NASDAQ today.

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