The stock markets in the United States declined primarily driven by the weakness of equities in the energy sector as crude oil prices dropped on Wednesday. The price of WTI Crude fell 3.82% to $40.25 per barrel while the Brent Crude slid 3.69% to $42.80 per barrel.
The Federal Reserve Beige Book indicated that the U.S. economy grew modestly in October and November. The Fed noted an increase in consumer spending; prices were generally steady, and the labor market continued to tighten modestly.
Earlier today, Federal Reserve Chairperson Janet Yellen expressed confidence that the U.S. economic growth is sufficient enough to achieve higher inflation and improvement in the labor market. Policymakers are expected to raise interest rates during their upcoming meeting on December 15 to 16.
Yellen told the Economic Club of Washington that waiting too long to raise the interest rates and end the near-zero interest rates could prompt the central bank to tighten abruptly, which could disrupt the financial markets.
According to her, “Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession.”
Millan Mulraine, the deputy head of U.S. research and strategy at TD Securities commented, “We got the sense from her [Yellen] that what she’s seen so far is that the economy can handle that initial rate hike.”
- Dow Jones Industrial Average (DJIA) – 17, 729.68 (-0.89%)
- S&P 500- 2,079.51 (+1.10%)
- NASDAQ- 5,123.22 (+0.64%)
- Russell 2000- 1,191.69 (+1.04%)
- EURO STOXX 50 Price EUR- 3,468.66 (-0.32%)
- FTSE 100 Index- 6,420.93 (+0.40%)
- Deutsche Borse AG German Stock Index DAX- 11,190.02 (-0.63%)
- Nikkei 225- 19,938.13 (-0.37%)
- Hong Kong Hang Seng Index- 22,479.69 (+0.44%)
- Shanghai Shenzhen CSI 300 Index- 3,721.96 (+03.63%)
Stocks in Focus
The stock price of Yahoo increased more than 5% to $35.75 per share. Analysts at Cowen and Company reiterated their rating on the stock to Market Perform with a price target of $35 per share. It was also reported that the company’s board is considering selling its internet business.
Qualcomm gained over 5% to $51.85 per share. The company reached a 3G/4G patent license agreement with Xiaomi. Under the agreement, Qualcomm granted Xiaomi a royalty-bearing patent license to develop, manufacture, and sell 3G (WCDMA and CDMA2000) and 4G, including 3-mode (LTE-TDD, TD-SCDMA, and GSM), complete devices.
The shares or Avon Products closed $3.72 per share, up by nearly 7%. The surge was caused by a rumor that Oprah Winfrey is acquiring a stake in the cosmetics company. A spokesperson for the star denied the speculations.