U.S. stock markets rebounded after a three-day decline, which was primarily caused by a selloff in momentum stocks or the biggest gainers in the bull market as investors move to lock in their profits prior to the earnings season.
Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, told Bloomberg that companies in the biotechnology and technology sectors are trading at very high valuations. According to him, the stocks “finally succumbed to the gravitational pull.” He added, “A lot of these growth stocks had been taken down 10 to 20 percent, but usually that loss finds a bottom.”
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On the other hand, Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research opined, “The hot markets simply got overstretched and it was probably time to correct. The bigger picture is the S&P 500 has been up five quarters in a row. We seem to be OK. There’s nothing wrong with a little sideways action.”
Today’s rally was driven by the gains in the shares of Amazon.com, Inc. (NASDAQ:AMZN), eBay Inc (NASDAQ:EBAY), Facebook Inc (NASDAQ:FB), and Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL).
- Dow Jones Industrial Average (DJIA)- 16,256.21 (+0.06%)
- S&P 500- 1,851.98 (+0.38 %)
- NASDAQ- 4,112.99 (+0.81%)
- Russell 2000- 1,144.66 (+0.78%)
- EURO STOXX 50 Price EUR- 3,177.66 (-0.26%)
- FTSE 100 Index- 6,590.69 (-0.49%)
- Deutsche Borse AG German Stock Index DAX- 9,490.79 (-0.21%)
Asia Pacific Markets
- Nikkei 225- 14,606.88 (-1.36%)
- Hong Kong Hang Seng Index- 22,596.97 (+0.98%)
- Shanghai Shenzhen CSI 300 Index- 2,237.32 (+2.37%)
Stocks in Focus
The stock price of Amazon.com, Inc. (NASDAQ:AMZN) rose almost 3% to $326.59 per share today. The e-commerce giant claimed that the usage for its instant video streaming service tripled year-over-year, which is the main reason behind the introduction of its new Fire TV set-top box. Analysts are forecasting that the earnings of the e-commerce giant will grow three times this year.
The shares of eBay Inc (NASDAQ:EBAY) climbed nearly 4% to $54.87 per share after ChannelAdvisor reported that the company’s same-store sales (SSS) increased from 15% to 17.8%. The report also indicated that eBay’s fixed-price sales climbed 21.5%, but its auction sales declined 10% year-over-year. TheStreet Ratings team has a Buy rating for the stock.
Facebook Inc (NASDAQ:FB) gained more than 2% to $58.19 per share. A recent study from Shopify showed that the company generates the largest number of purchases (63%) among the social networks. A related report from TechCrunch indicated that 80% of purchases at Shopify stores were brought in by the social network giant. Separately, the number of Facebook users in India reached 100 million.
The stock price of Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Class A and Class C shares increased by 3.12% to $557.51 per share and 3.11% to $554.90 a share, respectively. The search engine giant’s stock split started last week.