The stock markets in the United States ended the week in the red as investors are becoming increasingly concerned regarding the ongoing strife between the members of Congress on the issue of federal spending.
Investors are also weighing the next move of the Federal Reserve over the timing of the tapering of its quantitative easing (QE) or bond-buying program. Policy makers decided to maintain the $85 billion monthly stimulus and decided to wait for more economic progress.
Based on data compiled by Bloomberg, 24 economists are projecting that the Federal Reserve will start tapering its bond-buying activity in December. On the other hand, James Bullard, president of Federal Bank in Saint Louis said their decision not to reduce the stimulus was a “close call.” According to him, the Federal Reserve might implement a small cut next month.
“Weaker data came in. That was a borderline decision,” and “the committee came down on the side of, ‘Let’s wait.’ With inflation low, we can afford to be patient,” said Bullard during an interview with Bloomberg Television.
- Dow Jones Industrial Average (DJIA)- 15,439.38 (-1.13%)
- S&P 500- 1,709.70 (-0.73%)
- NASDAQ- 3,774.73 (-0.39%)
- Russell 2000- 1,072.53 (-0.25%)
- EURO STOXX 50 Price EUR- 2, 927.19 (-0.31%)
- FTSE 100 Index- 6,596.23 (-01.44%)
- Deutsche Borse AG German Stock Index DAX- 8,675.73 (-0.21%)
Asia Pacific Markets
- Nikkei 225- 14, 742.42 (-0.16%)
- Hong Kong Hang Seng Index- 23, 502.51 (+1.67%)
- Shanghai Shenzhen CSI 300 Index- 2, 432.51 (+0.21%)
Stocks In Focus
AK Steel Holding Corporation (NYSE:AKS) plunged by 7.6% to $4.11 per share after the steel manufacturer reduced its guidance for the third quarter of the current fiscal year. The company anticipated that it would incur losses in the range of $0.22 to $0.27 per share. According to the company, the unexpected furnace outage in Middletown, Ohio earlier in the quarter contributed losses of $0.09 per share.
The stock price of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) plummeted by 17% to $8.70 per share after the Canadian smartphone manufacturer announced that it might report huge losses of approximately $1 billion for the second quarter. The company also plans to cut 4,500 jobs.
Darden Restaurants, Inc. (NYSE:DRI) declined by more than 7% to $45.78 a share after the company posted weak quarterly financial performance. The owner of Red Lobster and Olive Garden said its net earnings dropped by 37.6% from $111 million, or $0.85 per share, to $70.3 million, or $0.53 per share.
Meanwhile, the stock value of Rockwell Collins, Inc. (NYSE:COL) declined by 5.76% to $70 per share after the airplane manufacturer issued a revenue forecast for its cockpit instruments that was lower than expected. The company projected to deliver $4.60 billion revenue for fiscal 2014, compared with the average $4.93 billion revenue estimate of analysts.