The stock markets in the United States declined driven by speculations that the Federal Reserve is close to implementing an interest rate hike as the labor market continues to improve.
The Department of Labor reported that the unemployment rate in the United States dropped from 5.7% to 5.5%, the lowest since the spring of 2008.
Last year was a banner year for hedge funds in general, as the industry attracted $31 billion worth of net inflows, according to data from HFM. That total included a challenging fourth quarter, in which investors pulled more than $23 billion from hedge funds. HFM reported $12 billion in inflows for the first quarter following Read More
According to the agency, the economy created 295,000 jobs last month compared with the 235,000 jobs expected by economists polled by Bloomberg. The figures show that the labor market maintains a steady progress.
The agency emphasized that the private sector has been creating jobs over the past five years—60 uninterrupted months of jobs growth. The economy already created total of more than 12 million jobs.
A statement, U.S. Secretary of Labor Thomas E. Perez said, “The labor market continues to strengthen, as the economy has increasingly added middle and high-wage jobs over the last two years… We must help more people reap the benefits of a growing economy, ensuring that no one gets left on the sidelines as this recovery continues to gather steam.”
“There is every reason to be bullish about the direction of our economy. But there’s every reason also to believe we can work together on common-sense, bipartisan solutions that will lead to even greater job growth and shared prosperity in the months and years to come,” added Sec. Perez.
The Federal Reserve previously stated that it can be patient when it comes to the timing of increasing the interest rates as the U.S. economy grow. On Thursdau, John Williams, president of the Federal Reserve Bank of San Francisco said a serious discussion regarding increasing the interest rates could happen in the middle of this year.
Chad Morganlander, a money manager at Stifel, Nicolaus & Co. told Bloomberg, “Investors are looking and focusing entirely on what the Federal Reserve will do in the coming months. Effectively good news in this data point supports the notion that they will raise rates in the not-too-distant future. That scotches the speculative fervor within the equity market.”
Stanley Druckenmiller recently stated that now is the ideal time for the Federal Reserve to raise interest rates. According to him, the economy can handle 25 or 50 basis points increase, which he considers to be still “extremely accommodative.”
- Dow Jones Industrial Average (DJIA) – 17,856.78 (-1.54%)
- S&P 500- 2,071.26 (-1.42%)
- NASDAQ- 4,927.37 (-1.11%)
- Russell 2000- 1,217.23 (-1.38%)
- EURO STOXX 50 Price EUR- 3,617.62 (-0.02%)
- FTSE 100 Index- 6,911.80 (-0.71%)
- Deutsche Borse AG German Stock Index DAX- 11,550.97 (+0.41%)
- Nikkei 225- 18,971.00 (+1.17%)
- Hong Kong Hang Seng Index- 24,164.00 (-0.12%)
- Shanghai Shenzhen CSI 300 Index- 3,478.52 (-0.51%)
Stocks in Focus
The stock price of Chesapeake Energy declined almost 5% to $15.17 per share. Analyst at Zacks Equity Research commented that the company “could be positioned for a slump” and investors should consider an exit. The research firm noted that the energy company endured a significant price decline over the past four weeks, and negative earnings estimate revisions for the current quarter and for the fiscal 2015.
On the other hand, the board of directors of Chesapeake Energy declared a $0.0875 quarterly dividend to keep and attract investors. The dividend will be paid on April 30. 2015
Cooper Companies surged 9% to $180.26 per share after reporting better-than-expected earnings for the first quarter. The global medical device company posted adjusted earnings of $1.75 per share, higher than the $1.54 per share consensus estimate of Wall Street analysts.
The shares of Newmont Mining tumbled almost 8% to $23.30 per share. The company disclosed in a regulatory filing that its EVP Stephen Gottesfeld sold 1,875 shares on the open market at an average price of $25.75 per share last Monday.