Stock Market News: SolarCity Corp, Nu Skin Enterprises, Inc.

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The stock markets in the United States declined after Federal Reserve chairperson Janet Yellen stated that the monthly bond buying program might end this fall. She also indicated that interest rates could increase six month later as reported by Bloomberg.

Based on the statement of the Federal Reserve, the target interest rate would be 1% by the end of 2015 and 2.25% the following year. The target interest rate was higher than the previous estimate as policymakers raised their expectations for gains in the labor market.

A majority of the members of the Federal Open Markets Committee (FOMC) maintained their conviction that the Fed will not raise the benchmark interest rate until next year. The Fed said it will evaluate a broad range of data in determining the timing of raising its rate from zero. Policymakers previously estimated that the bench interest rate will increase to 0.75% (average) next year and 1.75% by the end of 2016.

“The pace of tightening, once the Fed starts tightening, is a little bit faster than thought before and I think that’s why we’re getting this market reaction. Being reminded that the Fed will eventually raise rates is getting traders’ attention. We’re still a long way off and there are no signs in the economy about inflation,” according to John Canally, economic strategist at LPL Financial Corp.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 16,222.17 (-0.70%)
  • S&P 500- 1,860.77 (-0.61 %)
  • NASDAQ- 4,307.60 (-0.59%)
  • Russell 2000- 1,195.87 (-0.76%)

European Markets

  • EURO STOXX 50 Price EUR- 3,076.33 (+0.08%)
  • FTSE 100 Index- 6,573.13 (-0.49%)
  • Deutsche Borse AG German Stock Index DAX- 9,277.05 (+0.37%)

Asia Pacific Markets

  • Nikkei 225- 14,462.52 (+0.36%)
  • Hong Kong Hang Seng Index- 21,568.69 (-0.07%)
  • Shanghai Shenzhen CSI 300 Index- 2,120.87 (-0.81%)

Stocks in Focus

The stock price SolarCity Corp (NASDAQ:SCTY) dropped more than 5% to $72.70 per share despite reporting improved quarterly financial results. The solar panel company posted $267 million net income compared with $33 million losses in the same period a year ago.

The negative reaction towards the stock was primarily cause by the company’s weak guidance for the first quarter. The company expects to incur losses in the range of $0.70 to $0.80 per share compared with the $0.50 per share estimated by Wall Street analysts.

The shares of Nu Skin Enterprises, Inc. (NYSE:NUS) fell nearly 6% to $72.22 per share after the company postponed some of its promotional meetings in China. The company also stopped accepting new applications from people who wants to become part of sales force in the country. Nu Skin is facing investigation due to allegations that it is operating a pyramid scheme in China.

KB Home (NYSE:KBH) gained almost 6% to $18.72 per share after the company posted a profit of $10.6 million or $0.12 per share for the first quarter. Its revenue increased 11% to $45p.7 million. The company’s earnings were higher than the $0.08 per share estimated by Wall Street analysts.

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