The stock markets in the United States declined again today, a sign that investors continue to be concern about the global economic growth as commodities slide further.
U.S. equities dropped along with crude oil prices. The WTI crude declined 3.05% to $35.64 per barrel while the Brent crude fell 4.38% to $37.99 a barrel as traders anticipate the oversupply to continue.
Dave Lutz, head of exchange-traded funds trading at JonesTrading Institutional Services, told Bloomberg, “A lot of today’s movement is obviously around the oil patch. That’s definitely caused some angst in the equities market. Companies that are leveraged to commodities are breaking lower, and then you also have flows of funds into the Treasury market because people are buying Treasuries in anticipation of inflation. That is going to be the big driver of the day.”
Investors are now focusing their attention on the upcoming meeting of the Federal Reserve particularly its decision regarding interest rates. A majority of traders believed there is 72% chance the central bank would raise rates this month.
The Chicago Board Options Exchange Volatility Index (VIX) climbed 25% to 24.2, an indication of increased anxiety among investors amid expectations of a policy change by the Fed. Chairperson Janet Yellen recently said the U.S. economy is strong enough to withstand a rate hike.
Julian Emanuel, executive director of U.S. equity and derivatives strategy at UBS Securities, said, “There’s no question with the VIX certainly trading through 20 this morning, there’s a lot more volatility, and that’s something that investors need to be prepared for.”
Today, The Department of Commerce reported a 0.2% increase in U.S. retail sales for the month of November. On the other hand, The University of Michigan’s preliminary index of consumer confidence climbed from 91.3 to 91.8 this month.
- Dow Jones Industrial Average (DJIA) – 17, 265.21 (-1.94%)
- S&P 500- 2,012.37 (-1.94%)
- NASDAQ- 4,933.47 (+2.21%)
- Russell 2000- 1,123.79 (+2.20%)
- EURO STOXX 50 Price EUR- 3,203.21 (-2.04%)
- FTSE 100 Index- 5,952.78 (-2.22%)
- Deutsche Borse AG German Stock Index DAX- 10,340.06 (-2.44%)
- Nikkei 225- 19,230.48 (+0.97%)
- Hong Kong Hang Seng Index- 21,464.05 (-1.11%)
- Shanghai Shenzhen CSI 300 Index- 3,608.06 (-0.41%)
Stocks in Focus
The stock price of Corning Incorporated increased more than 5% to $18.68 per share. The company entered an agreement to sell its exchange its 50% stake in Dow Corning Corporation for 100% of the stock of a newly formed entity that will become its wholly-owned subsidiary. The new entity will hold 40% of Hemlock Semiconductor Group and approximately $4.8 billion in cash.
CSX Corporation gained more than 4% to $25.72 per share. The company is one of the biggest gainers among railroad operators in the United States. Twelve analysts believed that stock could trade as much as $38 per share.
Whole Foods Market surged more than 8% to $34.02 per share. ITG Market Research said the company’s sales trends were moving above consensus expectations.