Investors' skepticism about the future of the bond buying plan
dragged benchmarks to the third-straight day of losses. Some
weaker-than-expected earnings results also added to investors
woes. On the international front, Germany's factory output in
June improved at its fastest pace in past two years. Of the top
10 S&P 500 industry groups, consumer discretionary stocks
suffered the most, while utilities stocks were the biggest
For a look at the issues currently facing the markets, make
sure to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) lost 0.3% to close the
day at 15,470.67. The S&P 500 decreased 0.4% to finish
yesterday's trading session at 1,690.91. The tech-laden Nasdaq
Composite Index slipped 0.3% to end at 3,654.00. The fear-gauge
CBOE Volatility Index (VIX) jumped 2% to settle at 12.98.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.49 billion shares, well
below than 2013's average of 6.36 billion shares. Declining
stocks outnumbered the advancers. For 67% shares that declined,
only 30% advanced.
Since the start of 2013, benchmarks have been driven to
multiple highs on the back of the bond purchase program. However,
investors have turned cautious over the uncertainty related to
the timing of tapering the stimulus program. In the last FOMC
meeting, it was specifically said that the tapering of bond
purchase program depends heavily on the employment figures and
controlling the inflation rate at 2%. Currently, neither of the
indicators have met their targets. On Tuesday, comments from two
Fed officials jolted the markets as they hinted at tapering the
bond buying program as early as next month.
A Federal Reserve data revealed that consumer credit increased
at 6% in second quarter. Within the consumer credit, revolving
credit increased by 2%, while nonrevolving credit increased 7.5%.
For the month of June, consumer credit increased at 6%.
On the earnings front, the Walt Disney Company (NYSE:
) modestly beat the Street's earnings expectations. Revenues of
the company came in at $11.58 billion, slightly higher than
$11.09 billion in last year. However, the figures were below
estimates. Net income came in at $1.85 billion or $1.03 a share,
compared with $1.83 billion last year or $1.01 a share.
Shares of First Solar, Inc. (NASDAQ:
) plunged 13.4% after its results came in below the Street's
estimates. The company's poor performance was attributable to
construction lags. The company said that it is in a process to
acquire General Electric Company (NYSE:
) cadmium telluride solar technology which will increase
operating costs in future.
Separately, German economy may be finally seeing a ray of hope
as its industry output moved north at the fastest pace in two
years. Industrial orders grew by 2.4% from prior month and
outpaced the consensus estimate of a 0.3% rise. An improvement in
the consumer sentiment, expansion of private sector and decrease
in unemployment indicates that the German economy is finally
climbing up the growth ladder primarily.
Utilities stocks emerged as the biggest gainer. The Utilities
SPDR (XLU) gained 0.5%. Stocks such as The Southern Company
), Dominion Resources, Inc. (NYSE:
), NRG Energy Inc. (NYSE:
), TECO Energy, Inc. (NYSE:
) and PPL Corporation (NYSE:
) gained 0.9%, 0.9%, 0.3%, 0.6% and 0.7%, respectively.
Consumer discretionary stocks suffered the most. The Consumer
Discretionary SPDR (XLY) lost 0.9%. Stocks such as CBS
), Electronic Arts Inc. (NASDAQ:
), Time Warner Inc. (NYSE:
) and Netflix, Inc. (NASDAQ:
) lost 0.7%, 0.4%, 0.4% and 2.6%, respectively.
CBS CORP (CBS): Free Stock Analysis Report
DOMINION RES VA (D): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
ELECTR ARTS INC (EA): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
SOUTHERN CO (SO): Free Stock Analysis Report
TECO ENERGY (TE): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis
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