The stock markets in the United States declined amid the continued concerns of investors regarding the slowing growth of the country’s economy due to weaker-than-expected economic data.
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Today, the ADP Research Institute reported that companies added 169,000 jobs in April, which was lower than the 200,000 jobs estimated by economists polled by Bloomberg. The Department of Labor is scheduled to release its jobs report on Friday. Economists forecasted that the economy created 230,000 jobs last month.
Today, the Department of Labor reported that the non-farm business sector labor productivity declined at 1.9% annual rate while the unit labor cost rose 5% in the first quarter.
Yesterday, the Department of Commerce reported that the U.S. trade deficit increased 43.1% to $51.4 billion in March, the largest gap since October 2008.
In an interview with Bloomberg, Robert Pavlik, chief investment strategist at Boston Private Wealth said, “The data this morning has people nervous, and after yesterday’s selloff, there are a lot of weak hands in the market.”
“People are worried about what Friday’s report is going to bring. They’re not fully committed — they’re just trying to ride the wave, and that’s caused some selling pressure to develop,” added Pavlik.
The inflation is still below the 2% target of the Federal Reserve, and the unemployment at 5.5% is still half a percentage higher than it should be, according to Charles Evans, president of the Federal Reserve Bank of Chicago.
Evans said, “I likely will not feel confident enough to begin to raise rates until early next year,” during a speech as the Columbus Economic Development Board.
Evans also told reporters at the event, “I think if we top out during this cycle with inflation not getting to 2 percent that’s going to be a problem for us longer term.”
U.S. Markets
- Dow Jones Industrial Average (DJIA) – 17,841.98 (-0.48%)
- S&P 500- 2,080.15 (-0.45%)
- NASDAQ- 4,919.64 (-0.40%)
- Russell 2000- 1,219.37 (+0.33%)
European Markets
- EURO STOXX 50 Price EUR- 3,558.03 (+0.32%)
- FTSE 100 Index- 6,933.74 (+0.09%)
- Deutsche Borse AG German Stock Index DAX- 11,350.15 (+0.20%)
Asia-Pacific Markets
- Nikkei 225- 19,531.63 (+0.06%)
- Hong Kong Hang Seng Index- 27,640.91 (-0.41%)
- Shanghai Shenzhen CSI 300 Index- 4,553.33 (-0.95%)
Stocks in Focus
Alexion Pharmaceuticals declined 8% to $155.01 per share after disclosing its agreement to acquire Synagev Biopharma for $8.4 billion. Alexion aims to expand its offerings of medicines for rare diseases. Following the acquisition, Alexion will have eight experimental medicines for 11 diseases.
The stock price of Synageva Biopharma climbed more than 112% to $203.39 per share driven by the acquisition news.
The shares of Moneygram International surged more than 21% to $9.49 per share. It was reported Western Union is in discussions to acquire the company. Its bigger competitor denied the acquisition talks and described the reports as “not accurate.”
The stock price of Western Union increased over 4% to $21.85 per share. The company announced that it reached a major milestone of donating more than $100 million to more than 2,700 non-government organizations that are providing support to thousands of families and individuals in 135 countries and territories.
News Corp dropped more than 6% to $14.99 per share. The company reported third quarter earnings that missed the consensus estimate of Wall Street analysts. News Corp posted adjusted earnings of $0.05 per share compared with the $0.07 per share expected by analysts. Its revenue was $2.06 billion, lower than the $2.12 consensus estimate.
