Dismal earnings numbers from Campbell Soup and a cautious
profit forecast from Best Buy dragged the major indices into
negative territory on Tuesday. The Dow moved away even further
from the milestone level achieved on Monday. The S&P 500
incurred its first two consecutive days of losses this month.
Meanwhile, Federal Reserve Chairman Ben Bernanke said the central
bank will continue with its monetary policy till needed. He added
that tapering will begin only after the labor market shows
positive momentum. The energy sector was the biggest gainer among
the S&P 500 industry groups while utilities lost the most.
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) slipped 0.1% to close the
day at 15,967.03. The S&P 500 dropped 0.2% to finish
yesterday's trading session at 1,787.87. The tech-laden Nasdaq
Composite Index fell 0.4% to end at 3,931.55. The fear-gauge CBOE
Volatility Index (VIX) edged up 2.21% to settle at 13.39.
Consolidated volume on the New York Stock Exchange was roughly
3.2 billion shares. Declining stocks outnumbered the advancers.
For 66% shares that declined, 30% advanced.
Major indices dropped further from their respective milestones on
Tuesday after Best Buy Co., Inc. (NYSE:
) gave a discouraging profit outlook, saying heavy promotions
during the holiday season will impact margins. The company
promised to provide competitive prices in the holiday season
ahead. This is keeping with what other bellwether retailers have
planned to do.
Thanksgiving and Black Friday are days when huge amount of
shopping is done by consumers in a year. Consumer spending is a
primary component of the economy, and the way consumers behave
during the holiday season will give a rough idea to investors
about the health of the U.S. economy.
Interestingly enough, Best Buy's third-quarter fiscal 2014
earnings of 18 cents per share outpaced market expectations and
reflected an improvement year on year. However, shares of Best
Buy Co., Inc. dropped nearly 11% to $38.78 per share owing to the
warning and investors overlooked the retailer's earnings beat.
Campbell Soup Company (NYSE:
) reported dismal quarterly numbers and its shares dropped more
than 6% to $39.20 per share. The world's biggest soup maker
reduced its fiscal 2014 forecast. The company decreased its
full-year adjusted earnings forecast to $2.53-$2.58 per share
Meanwhile, Fed chairman Ben Bernanke supported Janet Yellen's
position on monetary stimulus, saying that the economy needs to
improve further before the program is ended. Bernanke said: "The
FOMC remains committed to maintaining highly accommodative
policies for as long as they are needed". "I agree with the
sentiment, expressed by my colleague Janet Yellen at her
testimony last week that the surest path to a more normal
approach to monetary policy is to do all we can today to promote
a more robust recovery," he added. The Federal Open Market
Committee is scheduled to meet in December. Most economists don't
expect the Fed to start reducing its bond purchases till their
The energy sector was the biggest gainer among the S&P 500
industry groups. The Energy SPDR (XLE) gained 0.2%. Stocks such
as Chevron Corporation (NYSE:
), Anadarko Petroleum Corporation (NYSE:
), Apache Corporation (NYSE:
), Phillips 66 (NYSE:
), and Marathon Oil Corporation (NYSE:
) added 1.2%, 0.4%, 1.1%, 0.8%, and 1.2%, respectively.
The utilities sector dropped the most among the S&P 500
industry groups and the Utilities SPDR (XLU) lost 0.7%. Stocks
such as Duke Energy Corp (NYSE:
), Dominion Resources, Inc. (NYSE:
), NextEra Energy, Inc. (NYSE:
), The Southern Company (NYSE:
), and Exelon Corporation (NYSE:
) lost 0.6%, 0.1%, 2.0%, 0.6%, and 1.1%, respectively.
APACHE CORP (APA): Free Stock Analysis Report
ANADARKO PETROL (APC): Free Stock Analysis
BEST BUY (BBY): Free Stock Analysis Report
CAMPBELL SOUP (CPB): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
EXELON CORP (EXC): Free Stock Analysis Report
MARATHON OIL CP (MRO): Free Stock Analysis
NEXTERA ENERGY (NEE): Free Stock Analysis
PHILLIPS 66 (PSX): Free Stock Analysis Report
SOUTHERN CO (SO): Free Stock Analysis Report
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