The stock markets in the United States rallied earlier today but eventually ended the trading session lower. The Down Jones and S&P 500 dropped by 0.03% and 0.09% respectively. The NASDAQ was down 0.10%, and the Rusell 2000 dropped 0.14%.
The equity markets rose earlier primarily due to the positive momentum of the oil market. The price of WTI crude oil increased 0.44% to $56.64 per barrel, and the Brent crude oil rose 0.92% to $63.90 per barrel. The decline of semiconductor equities contributed to the downward movement of the stock markets today.
Commenting on the market trends, Matt Maley, an equity strategist at Miller, Tabak & Co. told Bloomberg, “We’re right up near the all-time highs in the S&P, and sometimes you take a breather before you break through those levels.”
Justin Wiggs, managing director of equity trading at Stifel Nicolaus commented, “With earnings season kicking off, people seem to be a little more on edge than normal.”
On the other hand, Stephen Freedman, head of cross-asset strategy at UBS Wealth Management Americas said, “It’s a market that is no longer cheap. You need to have earnings growing at a reasonable pace for the market to progress.”
He estimated that corporate earnings (excluding energy companies) will increase 8% to 10%, and the broad market benchmark could achieve single-digit returns this year. Freedman emphasized, “It’s an earnings-driven market.”
Investors are evaluating economic data to determine the timing of the first interest rate increase by the Federal Reserve. The central bank will likely raise rates this year, according to Fed Chairperson Janet Yellen recently.
- Dow Jones Industrial Average (DJIA) – 18,107.43 (-0.03%)
- S&P 500- 2,104.72 (-0.09%)
- NASDAQ- 5,005.77 (-0.10%)
- Russell 2000- 1,273.56 (-0.14%)
- EURO STOXX 50 Price EUR- 3,751.72 (-1.36%)
- FTSE 100 Index- 7,060.45 (-0.51%)
- Deutsche Borse AG German Stock Index DAX- 11,998.86 (-1.90%)
- Nikkei 225- 19,885.77 (+0.08%)
- Hong Kong Hang Seng Index- 27,618.82 (+0.21%)
- Shanghai Shenzhen CSI 300 Index- 4,380.51 (-1.30%)
Stocks in Focus
The stock price of Netflix surged more than 18% to $562.05 per share after the company reported better-than-expected subscriber growth. The company said it has 62 million subscribers worldwide. Its U.S. subscribers increased 2.28 million while its international subscribers rose 2.6 million in the first quarter. FBR analysts Barton Crockett and Howard Ma forecasted that the stock price of Netflix is headed to $900 per share.
The shares of SanDisk fell more than 4% to $67.91 per share after reporting quarterly earnings that missed the consensus estimate of Wall Street analysts. The company delivered adjusted earnings of $0.62 per share and $1.33 billion in revenue. Analysts expected SanDisk to report $0.66 in earnings per share on $1.31 billion in revenue for the first quarter.
UnitedHealth Group gained nearly 4% to $121.60 per share reported a better-than-expected profit for the first quarter and increased its guidance for the fiscal 2015. The largest health insurance company in the United States posted $1.4 billion in profits and $35.8 billion in revenue for the first quarter. UnitedHealth estimated that its 2015 revenue will increase by $2 billion.