The stock markets in the United States declined primarily due to the disappointing financial results of technology giants, Apple, Microsoft and Yahoo.
Robert Pavlik, chief market strategist at Boston Private Wealth, told Bloomberg, “Investors are cautious because some of the bigger names have missed expectations. The two giants reporting are what’s causing the weakness today. Earnings season really isn’t that bad.”
In an interview with CNBC, Peter Cardillo, chief market economist at Rockwell Global Capital commented, “Basically, it’s a repeat of yesterday. He noted that the broader stock market is being pulled by just a handful of companies.
On the other hand, William Lynch, director of investments at Hinsdale Associates said, “This week we’re getting a mixed bag of earnings. Expectations were low coming in and last week [earnings] came in better than expected We’re going to have to wait and see how the rest of earnings play out.”
The markets were also negatively impacted by the decline of equities in the energy sector as oil prices drop.
Today, the Brent Crude declined 1.82% to $56 per barrel, and the WTI Crude Oil fell 3.4% to $49.13 per barrel. The oil prices dropped due to the expansion of crude inventories in the United States. The Energy Information Administration (EIA) reported that the U.S. crude oil stocks increased 2.5 million barrels last week.
Meanwhile, the National Association of Realtors (NAR) reported a 3.2% increase in the sales of existing homes to a seasonally adjusted annual rate of 5.49 million units in June. The number is an indication that the housing market in the United States is experiencing a full recovery.
Standard Chartered Bank Senior Economist Thomas Costerg commented, “The housing market is on fire. The strength in housing could offset some of the weakness we are seeing elsewhere.”
- Dow Jones Industrial Average (DJIA) – 17,850.07 (-0.39%)
- S&P 500- 2,114.07 (-0.24%)
- NASDAQ- 5,171.77(-0.70 %)
- Russell 2000- 1,256.13 (+0.12%)
- EURO STOXX 50 Price EUR- 3,635.58 (-0.34%)
- FTSE 100 Index- 6,667.34 (-1.50%)
- Deutsche Borse AG German Stock Index DAX- 11,520.67 (-0.72%)
- Nikkei 225- 20,593.67 (-1.19%)
- Hong Kong Hang Seng Index- 25,282.62 (-0.99%)
- Shanghai Shenzhen CSI 300 Index- 4,157.16 (-0.21%)
Stocks in Focus
The stock price of Apple declined 4.56% to $124.80 per share after reporting its financial performance for the third quarter. The company posted earnings of $1.85 per diluted share on $49.6 billion in revenue. Analysts expected the company to deliver earnings of $1.89 per share on $49.2 billion in revenue. Its iPhone sales were 47.5 million, below the 48.8 million estimated by analysts. Apple lost $33 billion in market capitalization.
Caesars Entertainment recorded the biggest decline among the companies listed on NASDAQ today. The company’s stock price plummeted 42.39% to $4.62 per share after a federal judge rejected its petition for protection from lawsuits filed its creditors.
Microsoft shares fell 3.88% to $43.45 a piece. The software giant posted earnings of $0.62 per share on $22.18 billion in revenues. Analysts expected the company to achieve earnings of $0.56 per share on $22.03 billion in revenue. The company was negatively impacted by one-time charges related to the Nokia devices & services acquisition.
The shares of SanDisk declined 2.96% to $53.84 per share. The company posted $1.24 billion in revenue for the second quarter, down by 24% year-over-year. Its net income was $0.38 per share, down from $1.14 per share in the second quarter last year.