Market News: J.C. Penney, Microsoft, Safeway

The stock markets in the United States suffered another decline as investors are becoming more convinced that the Federal Reserve will start tapering its quantitative easing given the continuing improvement of the economy.

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Yesterday, the Federal Reserve Beige Book showed that the U.S. economic growth rate turned from modest to moderate in early October until the middle part of November fueled by continued positive performance of the auto, housing, and technology industries.

The gross domestic product (GDP) of the country on annual basis in the third quarter increased to 3.6% from the initial estimate of 2.8%, the highest growth rate since the first quarter of 2012.

In a phone interview with Bloomberg, Matthew Kaufler, portfolio manager at Federated Investors Inc commented the economic data “paves the way” for the Federal Reserve to reduce its bond-buying program. He added. “There’s angst in the short run, but I think it’s only positive in the long run that the Fed begin to taper and extricate itself from being the ultimate market maker.”

On the other hand, Dennis Lockhart, president of the Federal Bank of Atlanta said, “If and when the FOMC arrives at a decision to wind down asset purchases, it’s my view that it will be helpful to the transition process to provide as much certainty as possible about how this will be done.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 15,821.18 (-0.43%)
  • S&P 500- 1,785.07 (-0.43%)
  • NASDAQ- 4,033.17 (-0.12%)
  • Russell 2000- 1,122.47 (+0.10%)

European Markets

  • EURO STOXX 50 Price EUR- 2,953.17 (-1.29%)
  • FTSE 100 Index- 6,498.33 (-0.18%)
  • Deutsche Borse AG German Stock Index DAX- 9,084.95 (-0.61%)

Asia Pacific Markets

  • Nikkei 225- 15,177.49 (-1.50%)
  • Hong Kong Hang Seng Index- 23,712.57 (-0.07%)
  • Shanghai Shenzhen CSI 300 Index- 2,468.20 (-0.28%)

Stocks in Focus

The stock price of J.C. Penney Company, Inc. (NYSE:JCP) declined by more than 8.39% to $8.85 per share due to the report that Hayman Capital Management L.P., the hedge fund managed by Kyle Bass exited its position in the department store chain. The hedge fund owned 5.2% stake in the company. Bass said his firm still holds the company’s debt.

Microsoft Corporation (NASDAQ:MSFT) declined 2.41% to $38 per share. The stock was negatively affected by reports that Ford CEO Allan Mullaly reiterated his previous statements that he will remain in his position at the automaker until the end of 2014. He said, “There is no change in my plan.” Edsel Ford II, director and great grandson of the founder of Ford Motor (NYSE:F) also said the same thing, Mullaly will stay as CEO of the company until the end of next year.

The stock value of Safeway Inc. (NYSE:SWY) dropped 4.59% to $32.64 per share after Jana Partners reduced its stake in the company from 6.2% to 4.1%. The activist hedge fund first acquired its stake in the company in September. Back then, Jana Partners revealed that it is negotiating with the management of the company to reduce its stores and return capital to shareholders.