Benchmarks ended in the red zone on Friday after the Federal
Reserve indicated that it may not curtail the pace of
tapering. Also, dismal existing home sales data and futures
and options expiration dragged the markets down. Investors
also had to focus on certain dismal corporate earnings results.
The indices ended the week with losses, while S&P 500 fell
short of its record high set on January 15.
APPLE INC (AAPL): Free Stock Analysis Report
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EXPRESS SCRIPTS (ESRX): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
GROUPON INC (GRPN): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis
PRICELINE.COM (PCLN): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) lost 0.2% to close
Friday's trading session at 16103.30. The Standard & Poor 500
(S&P 500) too declined 0.2% to finish at 1836.25. The
tech-laden Nasdaq Composite Index fell 0.1% to 4263.41. The
fear-gauge CBOE Volatility Index (VIX) dropped 0.7% to settle at
14.68. Total volume on the New York Stock Exchange was 3.4
billion shares. Despite the fall, advancers outpaced the
decliners on the NYSE as for 55% stocks that gained, 41%
For the week, the Dow slipped 0.3% and the S&P 500 dipped
0.1%. However, the Nasdaq gained 0.5%.
The S&P 500 had surged to within three points of a record
high. However, indices had to decline as Fed officials indicated
that the central bank is willing to continue reductions in the
asset purchase program. Dallas Federal Reserve President
Richard Fisher said: "It is my firm belief that the fault in our
economy lies not in monetary policy but in a reckless and
feckless federal government that simply cannot get its fiscal and
regulatory policy geared so as to encourage business to take the
copious amount of money we at the Fed have created and put it to
work creating jobs and growing our economy".
Markets were also negatively impacted by disappointing existing
home sales data released by National Association of Realtors.
Sales of existing homes fell 5.1% to a seasonally adjusted annual
rate of 4.62 million in January from 4.87 million in December.
The fall was below the consensus estimate of 4.69 million for the
current period. Harsh winter weather, decline in affordability
and low inventories were cited as the prime factors for this
downturn. The existing home sales were also down to their lowest
level in about a year.
On the earnings front, Groupon Inc. (NASDAQ:
) saw its shares plummet 22%, the most in a year, after the
company reported fourth-quarter loss of 12 cents. Also, Groupon
expects to report loss of 4 cents to 2 cents for the first
quarter of 2014. This guidance lagged the Zacks Consensus
Estimate for earnings of 2 cents.
Stocks of the largest US pharmacy benefits manager Express
Scripts Holding Company (NASDAQ:
) fell 4% after reporting fourth quarter results. Excluding
special items, but including amortization expenses, earnings per
share came in at 72 cents compared to 67 cents in the year-ago
The Technology Select Sector SPDR (XLK) fell 0.4% and key stocks
such as Apple Inc. (NASDAQ:
), Facebook Inc. (NASDAQ:
), Intel Corp. (NASDAQ:
) and Hewlett-Packard Company (NYSE:
) plunged 1.1%, 1.5%, 1.3% and 1.3%, respectively.
Stocks from the Financial Select Sector SPDR (XLF) such as J P
Morgan Chase & Co. Depositor (NYSE:JPM-PA), Berkshire
Hathaway Inc. (NYSE:BRK-B) and Citigroup Inc. (NYSE:
) gained 0.1%, 0.1% and 0.3%, respectively.
The Consumer Discret Select Sector SPDR (XLY) gained 0.2%. Stocks
from the sector such as The Walt Disney Company (NYSE:
), McDonald's Corporation (NYSE:
), The Home Depot, Inc. (NYSE:
) and priceline.com Incorporated (NASDAQ:
) rose 1.2%, 0.75, 0.3% and 2.5%, respectively. The biggest loser
was Energy Select Sector SPDR (XLE) as it declined 0.8%. Major
stocks from the sector such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
) and Schlumberger Limited. (NYSE:
) dropped 0.4%, 1.7% and 1.1%, respectively.