The stock markets in the United Stated started the year 2014 with a sell-off. The S&P 500 started the year lower for the first time since 2008 after dropping 0.88% to 1,832.02 points today. The benchmark index’s 2013 annual gain of 30% was the highest over the past 15 years, according to Bloomberg.
Commenting on the movement of the stock market today, Oliver Wallin, investment director at Octopus Investment Ltd said, “More people seem to be wary, as we are, of potential corrections as markets get overexcited. The question is just when to time it. A lot of people are willing to continue in this rally but are nervous at the same time. We’ve got one eye on the exit but we know there is money to be made in the short term.”
Some Wall Street analysts are projecting a slowdown in equity returns. Data from Bloomberg indicated that analysts predicted that the prices of 116 stocks listed in the S&P 500 will decline this year. They also estimated that the stock price of an average company in the index could increase 4.8%, the least optimistic forecast since Dec.31, 2004. Back then, the average estimate was 4.7%.
Walter Todd, chief investment officer at Greenwood Capital Associates LLC, does not think that a sell-off will be the trend in the stock markets this year. According to him, “In fact, I would expect the market to trade up into earnings season and January. Once people start getting a read on the fundamentals for companies and outlooks, that will dictate how the market goes from there.”
The Department of Labor reported that the number of people that filed for unemployment benefits declined to 339,000 last week, the lowest level in one month. Freddie Mac/ Federal Home Loan Mortgage Corp (OTCBB:FMCC) reported that the average interest rates for fixed-rate mortgages increased—a sign of stronger economic recovery.
- Dow Jones Industrial Average (DJIA)- 16,457.76 (-0.72%)
- S&P 500- 1,832.02 (-0.88%)
- NASDAQ- 4,104.48 (-0.86%)
- Russell 2000- 1,150.15 (-1.16%)
- EURO STOXX 50 Price EUR- 3,059.93 (-1.58%)
- FTSE 100 Index- 6,717.91 (-0.46%)
- Deutsche Borse AG German Stock Index DAX- 9,400.04 (-1.59%)
Asia Pacific Markets
- Nikkei 225- 16,291.31 (+0.69%)
- Hong Kong Hang Seng Index- 23,340.05 (+0.14%)
- Shanghai Shenzhen CSI 300 Index- 2,321.98 (-0.35%)
Stocks in Focus
The stock price of Bank of America Corp (NYSE:BAC) rose 3.4% to $16.10 per share. Citigroup analyst Keith Horowitz upgraded his rating for the stock to Buy with a $19 price target. He believed that the bank will outperform this year as investors will perceive it as a “play on the U.S. economy due to an asset sensitive balance sheet and exposure to the US consumer.”
FireEye Inc (NASDAQ:FEYE) declined 5.69% to 41.13 per share today. However, the stock price of the company skyrocketed by more than 21% to $50.45 per share after hours. The spike was driven by its announcement that it entered a deal to acquire Mandiant Corp., a computer forensics specialist for $1 billion.
The stock value of Wynn Resorts, Limited (NASDAQ:WYNN) rose 1.92% to $197.94 per share today. The company is benefiting from the rapid growth of Macau.