The stock markets in the United States fluctuated and eventually ended the trading session down, except the Russell 2000, up by 0.43%. The Dow Jones, S&P 500, and NASDAQ went down after the momentum of equities of energy and consumer companies faded.
Bloomberg reported that the profits of S&P 500 companies declined by approximately $25 billion for the first three-quarters of 2015, and expected to decline furthers by the end of the year.
In a note to investors, Andrew Lapthorne, head of quantitative analysis research team at Societe Generale, wrote, “The question for us is not are we in a U.S. profit recession, but how bad is it likely to get and what are the implications for the wider U.S. economy, and with that massive consensus long on the U.S. dollar.”
The energy sector, which was severely impacted by plummeting oil prices, was the largest contributor to the profit decline of the S&P 500 companies.
Citi equity trading strategist Paul Choi said, “Since the downside in earnings came from lower oil prices and cheaper energy, this is not likely to happen again unless you think crude is going to $25 a barrel. At the same time, there is a stimulus to consumption that has not shown up yet.”
Meanwhile, Matt Maley, an equity strategist at Miller Tabak & Co commented that investors right now are asking if they really needed to step up to the plate after a 3% rally last week. He said the lack of positive reactions in the oil market and the concerns about Brussels were some of the reasons investors sit on their hands during Thanksgiving week.
A report today showed that the sales of previously owned home declined in October. The National Association of Realtors said existing home sales dropped to an annual rate of 3.4% to 36 million units last month.
Joel Naroff, chief economist at Naroff Economic Advisors, commented that the housing market is still in “decent shape.”
- Dow Jones Industrial Average (DJIA) – 17, 792.68 (-0.17%)
- S&P 500- 2,086.59 (-0.12%)
- NASDAQ- 5,102.48 (-0.05%)
- Russell 2000- 1,180.22 (+0.43%)
- EURO STOXX 50 Price EUR- 3,445.26 (-0.21%)
- FTSE 100 Index- 6,305.49 (-0.46%)
- Deutsche Borse AG German Stock Index DAX- 11,092.31 (-0.25%)
- Nikkei 225- 19,879.81 (+0.10%)
- Hong Kong Hang Seng Index- 22,665.90 (-0.39%)
- Shanghai Shenzhen CSI 300 Index- 3,753.34 (+0.39%)
Stocks in Focus
The stock price of KaloBios Pharmaceuticals surged again by more than 116% to $39.50 per share. The company named Martin Shkreli as chairman and chief executive officer. A group of investors led by Shkreli acquired 70% of the outstanding shares of KaloBios.
Hewlett Packard Enterprises declined more than 2% to $13.85 per share. Maximum Group started covering the stock with a Hold rating.
The shares of GameStop fell more than 4% to $37.62 a piece. The company reported that its third-quarter earnings declined to $57 million or $0.54 per share from $64.3 million or $0.57 per share in the same period last year. The company also missed the $0.59 per share expected by Wall Street analysts.
The stock value of Tyson Foods surged more than 10% to $48.10 per share. The company reported quarterly sales that exceeded the expectations of Wall Street analysts. Tyson Foods said its net income was $0.63 per share and sales were $10.51 billion. Analysts expected the company to deliver $10.27 billion in sales.