Stock markets in the United States recorded losses today driven by a sell-off in technology stocks led by Yelp Inc (NYSE:YELP) and Twitter Inc (NYSE:TWTR).
The Dow Jones Industrial Average (DJIA) dropped 0.78%, the S&P 500 declined 0.90% and the NASDAQ fell 1.38% today.
In a telephone interview with Bloomberg, Bill Schultz, chief investment officer at McQueen Ball & Associates commented, “It seems the market is heavy. You have more of the slightly riskier stocks that have run into trouble here, in particular, tech and biotech.” He added that financial stocks are also under pressure.
Today the biggest losers in the stock markets are biotechnology, small-cap, and technology companies, as investors resumed selling their stakes in the biggest gainers or momentum stocks.
David Einhorn, hedge fund manager of Greenlight Capital, clarified his previous statement regarding a new technology bubble during a conference call sponsored by his reinsurance firm, Greenlight Capital Re Ltd. Einhorn said, “I’d like to clarify Greenlight’s remarks about a new technology bubble. In general, we are bullish on technology and technology stocks.” He perceives some companies like Apple Inc. (NASDAQ:AAPL) as being underpriced.
On the other hand, Peter Tuz, president of Chase Investment Counsel Corp, opined that the current earnings season is not robust. According to him, “The market is going to be range-bound without a clear trend until economic statistics point one way or another and companies’ outlooks point one way or another.”
Meanwhile the Organization for Economic Cooperation and Development (OECD) lowered its global growth forecast from 3.6% to 3.4% due to the economic slowdown in China and other emerging markets.
- Dow Jones Industrial Average (DJIA)- 16,401.02 (-0.78%%)
- S&P 500- 1,867.72 (-0.90 %)
- NASDAQ- 4,080.76 (-1.38%)
- Russell 2000- 1,109.47 (-1.49%)
- EURO STOXX 50 Price EUR- 3,149.79 (-0.68%)
- FTSE 100 Index- 6,798.56 (-0.35%)
- Deutsche Borse AG German Stock Index DAX- 9,467.53 (-0.65%)
- Nikkei 225- 14,457.51 (-1.27%)
- Hong Kong Hang Seng Index- 21,976.33 (-0.19%)
- Shanghai Shenzhen CSI 300 Index- 2,157.33 (+0.04%)
Stocks in Focus
The stock price of American International Group Inc (NYSE:AIG) declined more than 4% to $50.54 per share after the insurance giant reported a significant decline in net income for the first quarter. AIG’s net income dropped 27% to $1.61 billion or $1.09 earnings per share. Its profit was negatively impacted by a $97 million underwriting loss incurred by its property-casualty business.
The stock price of Yelp Inc (NYSE:YELP) plummeted more than 13% to $52.13 per share after the shareholders’ rights law firm Johnson and Weaver LLP revealed that it was conducting an investigation of the online review company regarding “potential violations of the federal securities laws.” The law firm wants to find out whether certain statements regarding Yelp’s business practices, prospects and financial condition were false and misleading. The law firm said its investigation is primarily focused on the true nature of reviews posted on Yelp’s website, the reliability of its processes and algorithms, and screening potentially unreliable reviews.
Twitter Inc (NYSE:TWTR) fell almost 18% to $31.85 per share today. Market observers believed that the steep decline of the stock was caused by the expiration of its lock-up period, which prevented insiders from selling their shares in the company.