Market News: Alcoa, Global Payments, Tesla Motors, Tenet

Market News: Alcoa, Global Payments, Tesla Motors, Tenet
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The stock markets in the United States went to the downside today after recording gains yesterday as investors started to weigh the effect of the ongoing government shutdown. Today’s stock trading was also negatively affected by the data released by ADP Research Institute indicating that the number of new employees hired by companies was fewer in September.

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The ADP Research Institute reported that 166,000 jobs were added in the labor market, lower than the 180,000 jobs projected by economists based on data compiled by Bloomberg.

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Mark Zhandi, chief economist at Moody’s Analytics, Inc said, “The job market appears to have softened in recent months. Fiscal austerity has begun to take a toll on job creation.” He also opined that higher interest rates “may also be doing some damage.”

Given the current situation with Democrats and Republican lawmakers blaming each other for the government shutdown, it seems that the stalemate will continue and the issue will not be resolved quickly.

Paul Zemsky, chief investment officer at ING Investment management said, “The market is trying to figure out how serious the situation in Washington is. Today’s worry is that it is more serious than we originally thought, which is putting pressure on the market.”

On the other hand, Stephen Stanley, chief economist at Pierpont Securities LLC said, “The impact on the broader economy does start to kick in as the shutdown extends beyond a week, two weeks. If it’s a couple of days or even a week it’s something that we’ll have forgotten about a month or two from now.”

In an exclusive interview with CNBC, President Barack Obama reiterated that the shutdown was unnecessary and he was “exasperated.”  The President said he is prepared to negotiate as long as there is a clean, continuing resolution to open the government. He emphasized that the Democrats already agreed to the spending levels demanded by the Republicans. The President said House Republican Speaker John Boehner could end the shutdown by bringing a clean budget bill to the floor.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 15,126.65 (-0.43%)
  • S&P 500- 1,693.06 (-0.11%)
  • NASDAQ- 3,814.31 (-0.10%)
  • Russell 2000- 1,082.36 (+0.80%)

European Markets

  • EURO STOXX 50 Price EUR- 2, 918.31 (-0.50%)
  • FTSE 100 Index- 6,437.50 (-0.35%)
  • Deutsche Borse AG German Stock Index DAX- 8,629.42 (-0.69%)

Asia Pacific Markets

  • Nikkei 225- 14, 170.49 (-2.17%)
  • Hong Kong Hang Seng Index- 22,984.48 (+0.55%)
  • Shanghai Shenzhen CSI 300 Index- 2, 409.04 (+0.59%)

Stocks In Focus

The stock price of Alcoa Inc (NYSE:AA) declined by nearly 2% to $8.02 per share after Deutsche Bank analyst Jorge Beristain downgraded his rating for the stock from hold to sell. The analyst projected that the aluminum giant’s primary metals operation might return to negative free cash flow for the second time since the global financial crisis, which could lead to an accelerated shutdown of below-water-pot-lines, and its entire high cost smelters in certain cases. He estimated that ~400k or 9 percent of Alcoa’s smelter systems remain at risk for a potential shutdown. Beristain projected that the shares of Alcoa might decline to as low as $5.50 a share.

Global Payments Inc (NYSE:GPN) surged by 11.42% to $56.49 per share after the company increased its 2014 earnings forecast in the range of $3.40 to $3.47 per share, and reported a better-than-expected quarterly financial results. The company posted $0.87 earnings per share, up from $0.50 EPS in the same period a year earlier.

The stock value of Tesla Motors Inc (NASDAQ:TSLA) declined by 6.24% to $180.95 per share after Robert W. Baird analyst, Ben Kallo lowered its rating for the stock from outperform to neutraldue to “execution risk” in connection with the electric car manufacturer’s production milestone for its Model S vehicle.

Meanwhile, Tenet Healthcare Corp (NYSE:THC) gained 6.12% to $43.90 per share after Kevin Fischbeck, analyst at Bank of America Corp (NYSE:BAC) said that the company is in a good position to gain business on the BlueCross BlueShield of Texas. The company recently announced the completion of its acquisition of Vanguard Health Systems for $1.8 billion.

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