Market Bubble Goes Pop!

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market-bubble It was a rough week for stocks that ended with carnage. Friday's sell-off may not have been of epic proportions, but a 2% loss across the board on the major indexes is a big deal. The bears took firm control with the Dow Industrial Index down 318.24 to close at 15,879.11. The Nasdaq fared a bit worse with a loss of 90.70 finishing at 4,128.17.

We can now classify the action as a bona-fide pull-back. Some will say this market bubble pop has been long overdue after an impressive 2012 and 2013 for stocks . Those folks will be of the opinion that more selling on the way. Others will look at the action as an opportunity to buy.

What is known for sure is that current selling was triggered by concerns in emerging markets . The buzz word of the day was contagion. Could it be another Asian sort that gave the market fits in the 1990s?

Whatever the case may be the selling on Friday, though persistent, did not have the look of a panic. How the market rebounds from here will be important to watch.

Microsoft bucks the trend on strong earnings

While it may have looked like red everywhere in the market there were pockets of green. One such winning stock was Microsoft ( MSFT ) . The software giant put an exclamation point on a fine year with earnings that beat expectations in the fourth quarter. Microsoft made 78 cents per share in the period on revenues of $24.52 billion. The average estimate was for the company to make 68 cents on $23.68 billion.

The performance lifted shares in the after-hours market after the news was released on Thursday. The strength was maintained despite weakness in the overall market. Microsoft sales of Xbox  and Surface tablet computers fueled the earnings and revenue beat.

Starbucks overcomes weak mall traffic

So much for worries about slowing mall traffic, Starbucks ( SBUX ) was another winner on Friday thanks to a solid earnings report. On Thursday after the market closed the company reported that it made 71 cents per share in the fourth quarter, beating estimates by 2 cents per share. In addition, Starbucks said it expects  profit in the year ahead to be in a range of $2.59 to $2.67 up from a prior range of $2.55 to $2.65.

Shares of Starbucks finished with a 2% gain on Friday.

ETrade falls despite strong earnings

Earnings couldn't save the day for ETrade Financial ( ETFC ) as the stock finished Friday with a fractional loss, rallying gallantly in afternoon trading. The company reported earnings after the close on Thursday that beat estimates by a penny per share. Revenues also beat expectations.

The stock opened higher on Friday, but quickly succumbed to the overall selling pressure in the market. An afternoon rally cut the losses to a mere few pennies when all was said and done.

On Deck: The Stock Market Today

Stocks look to recover on Monday. Futures are pointing to a higher open across the board. This week will see plenty more on earnings including results from Apple ( AAPL ) .

Before the market opened Caterpillar ( CAT ) reported better than expected results. Its shares are up more than 6% in pre-market trading .

Usually Monday's are days when mergers and acquisitions are announced, but this weekend was relatively quiet. The only news to speak of is Google (GOOG) buying artificial intelligence company DeepMind. Thanks for checking out today's edition of the Stock Market Today and we encourage you to leave a comment below.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MSFT , SBUX , ETFC , AAPL , CAT

Wyatt Investment Research

Wyatt Investment Research

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