The stock markets in the United Stated declined driven by the weakness of commodities sector and the selloff in the biotechnology industry. The global auto industry was also affected by the Volkswagen diesel-emission cheating scandal.
In an interview with Bloomberg, Joseph Betlej, vice president of Advantus Capital Management commented that today’s market movement was a “hangover” from the decision of the Federal Reserve. He added that the market experienced a “little bounce” yesterday.
Furthermore, Betlej said, “With macro uncertainty and very little fundamentals overall, when you see a rise in volatility it leads to investor uncertainty and any bad news has the opportunity to shake things up.”
Yesterday, the equity markets gain after four Federal Reserve officials stated the possibility of an interest rate hike before the end of this year. The central bank maintained its current federal funds rate due to the recent global market turmoil and the slowdown of the Chinese economy.
Today, the Federal Housing Finance Agency (FHFA) reported that the House Price Index (HPI) increased 0.6% in July. According to the agency the prices of houses in the United States climbed 5.8% over the past 12 months.
Brent Schutte, a senior investment strategist at BMO Global Asset Management, said, “On days when there’s not much economic data that can lead to bigger moves. People are selling or buying off things that aren’t grounded in fundamentals.”
- Dow Jones Industrial Average (DJIA) – 16, 330.47 (-1.09%)
- S&P 500- 1,942.74 (-1.23%)
- NASDAQ- 4,756.72 (-1.50%)
- Russell 2000- 1,143.03 (-1.55%)
- EURO STOXX 50 Price EUR- 3,076.05 (-3.41%)
- FTSE 100 Index- 5,935.84 (-2.83%)
- Deutsche Borse AG German Stock Index DAX- 9,570.66 (-3.80%)
- Nikkei 225- 18,070.21 (-1.96%)
- Hong Kong Hang Seng Index- 21,796.58 (+0.18%)
- Shanghai Shenzhen CSI 300 Index- 3,339.03 (+0.93%)
Stocks in Focus
The stock price of ConAgra Foods declined 7% to $39.40 per share. The company posted quarterly earnings of $0.45 per share, higher than the $0.40 per expected by analysts. However, its $2.79 billion in revenue was lower than the $3.69 billion consensus estimate.
Groupon announced its decision to cut 1,100 jobs globally, which will be completed by September next year. The stock price of the online local marketplace operator declined more than 2% to $4.07 per share today.
The stock price of Volkswagen fell more than 16% to $25.44 per share on the OTC Markets today. The company’s stock was primarily affected by its admission of cheating the emissions tests in the United States.