U.S. stock market indicators, particularly the NASDAQ and the S&P 500, declined, while the Dow Jones Industrial Average (DJIA) managed to end the trading session with gains today. Companies in the utility and technology sectors led the losses.
Walter Todd, chief investment officer at Greenwood Capital Associates, told Bloomberg, “We continue to see this churning of the market and rotation out of hyper-growth names into value. You see strength in the morning as people try to see if there’s going to be a breakout, and when that doesn’t occur, you see selling come in the afternoon.”
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On the other hand, Chris Gaffney, a senior market strategist at Everbank Financial, perceived “some volatility ahead.” He said, “Momentum stocks are still going to face some tough times going forward.”
The U.S. Department of Labor reported that the number of people who filed for unemployment benefits declined by 26,000 to 319,000 last week, which was lower than expected.
Stock markets in Europe gained after the European Central Bank (ECB) indicated its intention to reduce interest rates next month if necessary. ECB President Mario Draghi also expressed strong concerns regarding the European currency’s (the euro) exchange rate after policy makers maintained the primary refinancing rate at 0.25%. The euro dropped versus all 16 major currencies, excluding the Swedish krona. The euro declined 0.4% to $1.3854.
In a telephone interview with Bloomberg, Matt Maley, an equity strategist at Miller Tabak & Co., commented, “It seems the market is making a big bet that the ECB is going to start a QE program pretty soon.” Investors are increasing their investments in bond markets in the European region, as they are optimistic that the ECB will step in to support it.
- Dow Jones Industrial Average (DJIA)- 16,55.10 (+0.20%%)
- S&P 500- 1,875.65 (-0.14 %)
- NASDAQ- 4,051.50 (-0.40%)
- Russell 2000- 1,098.46 (-0.91%)
- EURO STOXX 50 Price EUR- 3,204.30 (+1.41%)
- FTSE 100 Index- 6,839.25 (+0.63%)
- Deutsche Borse AG German Stock Index DAX- 9,607.40 (+0.90%)
- Nikkei 225- 14,163.78 (+0.93%)
- Hong Kong Hang Seng Index- 21,837.12 (-0.42%)
- Shanghai Shenzhen CSI 300 Index- 2,135.50 (-0.09%)
Stocks in Focus
The stock price of Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) increased more than 7% to $17.73 per share after the bank disclosed that it will eliminate 14,000 jobs this year to streamline its operations. The company also plans to make further reductions in its investment banking unit over the next two years, bringing its total job cuts to 19,000 by 2016.
The stock price of Tesla Motors Inc (NASDAQ:TSLA) continues to decline as investors show their disappointment with the second quarter guidance from the electric vehicle manufacturer, particularly the number of deliveries for the Model S. Barclays Equity Research released a note to investors saying that the demand for the Model S in the United States faces some risk due to increased competition from BMW. Shares of Tesla plummeted more than 11% to $178.59 per share. An equity risk management firm issued an exit trigger to investors, as the stock remained at an elevated risk level.
The stock price of PowerSecure International, Inc. (NYSE:POWR) dropped a staggering 61% to $7.04 per share after the company reported a disappointing financial results for the first quarter. The company reported that its revenue rose 17% to $52.8 million, but it incurred losses of $4.3 million or 19 cents per share because of higher expenses. Its losses were higher than the 17 cents per share per share forecast by Wall Street analysts.