Benchmarks lost out on their initial gains on Wednesday and
ended in the red after corporate results dampened sentiment yet
again. Also, the Federal Reserve's announcement that the U.S.
economy still needs a push to increase growth and improve the
employment situation kept the cautious tone alive. As for
economic data, new home sales increased during the month of
The Dow Jones Industrial Average (DJI) slipped 0.2% to close
the day at 13,077.42. The Standard & Poor 500 (S&P 500)
lost 0.3% to finish yesterday's trading session at 1,408.76. The
tech-laden Nasdaq Composite Index dropped 0.3% to end at
2,981.70. The fear-gauge CBOE Volatility Index (VIX) dropped 2.7%
to settle at 18.33. Total volumes on the New York Stock Exchange
were roughly 3.38 billion shares. The decliners on the New York
Stock Exchange outpaced advancing stocks; as for 42% stocks that
gained, 53% stocks closed lower.
Benchmarks' initial gains were eroded after the U.S. Federal
Reserve's policy meeting announcement. After the meeting, Fed
policy makers said the U.S. economy is growing at a modest pace
and need a push to accelerate the growth and improve the job
market situation. The Federal Open Market Committee stated: "The
Committee remains concerned that, without sufficient policy
accommodation, economic growth might not be strong enough to
generate sustained improvement in labor market conditions". The
central bank remained committed to its stimulus measures and
would do so until the job market improves. The Fed had announced
in September that it will buy back mortgage-backed securities
worth $40 billion every month till labor conditions improve.
Policy makers also emphasized they recommended keeping the
interest rate near zero until mid-2015.
Commenting on inflation, the Fed said that it has "recently
picked up somewhat, reflecting higher energy prices." As for the
housing sector, Fed said the sector "has shown some further signs
of improvement, albeit from a depressed level."
Interestingly, on a day when the central bank made positive
comments about the housing sector and also commented that
household spending "has advanced a bit more quickly", the U.S.
Department of Housing and Urban Development actually reported a
jump in new home sales. According to the report, new home sales
surged 5.7% from August to a seasonally adjusted annual rate of
389,000 in the month of September; beating consensus estimates of
385,000. Sales of single-family homes reached its highest level
since April 2010. The report also stated: "The median sales price
of new houses sold in September 2012 was $242,400; the average
sales price was $292,400. The seasonally adjusted estimate of new
houses for sale at the end of September was 145,000. This
represents a supply of 4.5 months at the current sales rate".
The SPDR S&P Homebuilders increased 0.1% boosted by new
home sales data. Stocks such as KB Home (NYSE:
), The Ryland Group, Inc. (NYSE:
), Lennar Corporation (NYSE:
), Standard Pacific Corp. (NYSE:
) and Hovnanian Enterprises, Inc. (NYSE:
) surged 1.6%, 1.5%, 1.2%, 1.7% and 2.5%, respectively.
Meanwhile, Netflix, Inc. (NASDAQ:
) reported its third-quarter results. The company's earnings
plummeted compared to the year-ago. Quarterly revenues increased
but the company reduced its forecast for full year subscriber
growth. The company reduced its domestic video streaming
subscriber forecast for this year to 4.7-5 million from 7
million. Shares of Netflix plunged 12%. .
Shares of broadcasting and cable TV industry's stocks fell
yesterday. Stocks such as DISH Network Corp. (NASDAQ:
), CBS Corporation (NYSE:
), The Walt Disney Company (NYSE:
), Coinstar, Inc. (NASDAQ:
) and Liberty Global Inc. (NASDAQ:
) fell by 1.4%, 0.6%, 0.2%, 1.0% and 0.4%, respectively.
The energy sector had yet another bad run yesterday and was
the major loser among the S&P 500 industry group. Energy
Select Sector SPDR fell 0.8%. Stocks such as ConocoPhillips
), Exxon Mobil Corporation (NYSE:
), Anadarko Petroleum Corporation (NYSE:
), Devon Energy Corporation (NYSE:
) and Noble Energy, Inc. lost 0.2%, 0.3%, 1.1%, 1.1% and 1.5%,
ANADARKO PETROL (APC): Free Stock Analysis
CBS CORP (CBS): Free Stock Analysis Report
CONOCOPHILLIPS (COP): Free Stock Analysis
COINSTAR INC (CSTR): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis
DEVON ENERGY (DVN): Free Stock Analysis
HOVNANIAN ENTRP (HOV): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
LIBERTY GLBL-A (LBTYA): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
STANDARD PAC (SPF): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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