The stock markets in the United States extended declines due to investors’ concern about corporate earnings after JPMorgan reported disappointing financial performance. Additionally, Wal-Mart Stores expected its earnings to decline next year.
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In an interview with Bloomberg, Chad Morganlander, a money manager at Stifel Nicolaus commented that Wal-Mart shook the overall market with its huge reset of expectations. According to him, “Investors are considering their future forecasted growth rates for S&P earnings. That’s putting a lid on today’s trade.”
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
Analysts forecasted that the earnings of S&P 500 companies would decline 7.2% in the third quarter.
Today, the U.S. Department of Commerce reported that the retail sales climbed 0.1%, less than the 0.2% expected by economists. Market observers suggest that the weak retail sales growth raises concern regarding the momentum in consumer spending, which account 70% of the economy.
Mark Kepner, an equity trader at Themis Trading said, “This Wal-Mart news is an opening shot when it comes to the growth story right now. This on top of the retail sales numbers that were fairly weak to begin with. Growth is a worry already, globally. Companies that are going to be reporting earnings or commenting on earnings with slowing growth are going to be hit pretty hard.”
Yesterday, Federal Reserve Governor Daniel Tarullo said he does not support raising interest rates this year.
Meanwhile, the Federal Reserve’s Beige Book report on regional economic conditions indicated a modest economic growth from mid-August to early October.
- Dow Jones Industrial Average (DJIA) – 16, 924.01 (-0.92%)
- S&P 500- 1.994.16(-0.48%)
- NASDAQ- 4,782.85 (-0.29%)
- Russell 2000- 1138.70 (-0.80%)
- EURO STOXX 50 Price EUR- 3,192.57 (-0.92%)
- FTSE 100 Index- 6,269.61 (-1.15%)
- Deutsche Borse AG German Stock Index DAX- 10,037.60 (-0.77%)
- Nikkei 225- 17,891.00(-1.89%)
- Hong Kong Hang Seng Index- 22,439.91 (-0.71%)
- Shanghai Shenzhen CSI 300 Index- 3,406.11 (-1.13%)
Stocks in Focus
The stock price of BofI Holding plummeted more than 30% to $99 per share due to the report that its former auditor filed a lawsuit against it. The former auditor alleged that he was fired for exposing corporate and regulatory wrongdoing within the bank.
Wal-Mart Stores declined more than 10% to $60.03 per share primarily due to its disappointing outlook. The retail giant expected to suffer a 6% to 12% decline in earnings for its fiscal 2017.
The stock price of Liberty Tripadvisor Holdings surged more than 27% to $30.91 per share. It is the biggest gainer among the companies listed on NASDAQ today.