The stock markets in the United States declined again today driven by the declines in the consumers and technology sectors, and the continued concerns about the strength of the U.S. dollar.
Yesterday, the markets suffered significant declines as investors were concerns about the continued strength of the dollar, and increasing speculations that the Federal Reserve is moving closer toward implementing interest rate hikes. The U.S. dollar rose to a 12-year high against the euro.
Commenting on the market trends, Terry Sandven, chief equity strategist at U.S. Bank Wealth Management told Bloomberg, “The mood has shifted toward a wait-and-see environment as investors await greater clarity on earnings and possible Fed action.”
On the other hand, Wunderlich Securities chief market strategist Art Hogan told CNBC, “Fear of what negative impact the strong dollar has without thinking of positives.” The research firm noted that the S&P 500 declined in 19 out of the previous 27 trading days when the U.S. dollar strengthened.
“This suggests the market has started pricing in the negative effect on the U.S. economy,” said Athanasios Vamvakidis, head of G10 FX strategy for Bank of America Merrill Lynch (BAML) in Europe. He added that there is a “risk that there is a risk that further dollar strength could impact the U.S. market” given its rate of acceleration.
According to Bloomberg, analysts are forecasting that companies in the S&P 500 would decline 5.1% in the current quarter.
- Dow Jones Industrial Average (DJIA) – 17,635.39 (-0.16%)
- S&P 500- 2,040.24 (-0.19%)
- NASDAQ- 4,894.94 (-0.20%)
- Russell 2000- 1,215.79 (+0.61%)
- EURO STOXX 50 Price EUR- 3,649.54 (+2.41%)
- FTSE 100 Index- 6,721.51 (+0.28%)
- Deutsche Borse AG German Stock Index DAX- 11,805.99 (+2.66%)
- Nikkei 225- 18,732.52 (+0.31%)
- Hong Kong Hang Seng Index- 23,717.97 (-0.75%)
- Shanghai Shenzhen CSI 300 Index- 3,524.65 (+0.11%)
Stocks in Focus
The shares of CONN’S surged almost 15% to $27.50 per share today. Citadel Investment Group, the hedge fund managed Ken Griffin recently increased its stake to 1.79 million shares or 4.9% of the outstanding shares of the company.
The stock price of Lumber Liquidators closed $32.74 per share, up by almost 11% today. In fact, the stock increased as much as $34.44 per share today. Lumber Liquidators benefited from the report that activist investor Robert Chapman initiated a long position in the shares of the company. An increasing number of hedge fund managers and large investors also questioned the methodology used by 60 Minutes in its report regarding the safety of the products of the company.
Vera Bradley plummeted more than 16% to $15.14 per share after reporting earnings that missed the expectations of Wall Street analysts. The company posted earnings of $043 per share on $152.6 million revenue for the fourth quarter. Analysts expected the company to achieve $0.45 in earnings per share on $160.3 million revenue.