Stock Market News for September 04, 2014 - Market News

By Zacks Equity Research,

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Benchmarks ended mostly in the negative territory on Wednesday after a drop in Apple shares weighed on the broader markets. A possibility of a cease-fire between Ukraine and Russia had initially lifted the markets. Meanwhile, investors were reluctant to bet big bucks ahead of the European Central Bank's monthly policy meeting on Thursday.

For a look at the issues currently facing the markets, make sure to read today's  Ahead of Wall Street  article

The Dow Jones Industrial Average (DJI) gained a meager 0.06% to close at 17,078.28 The Standard & Poor 500 (S&P 500) had hit an intraday record high of 2009.28, before dropping 0.08% to settle at 2,000.72. The tech-laden Nasdaq Composite Index closed at 4,572.57; declining 0.6%. The fear-gauge CBOE Volatility Index (VIX) went up 0.9% to settle at 12.36. A total of 2.8 billion shares were traded in the NYSE on Wednesday. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.

Shares of Apple Inc. ( AAPL ) took a beating yesterday after Samsung unveiled two large-screen phones and a virtual reality device. The new products were launched concurrently in New York, Beijing and Berlin. Apple's biggest rival released these products before the much-awaited release of iPhone 6 on Sep 9. Shares of Apple dropped 4.2% to $98.94, its worst one-day percentage decline since Jan 28.

A total of 120 million Apple shares were traded on Wednesday, more than its long-term average of 68.66 million shares per person.

Apple was the second biggest laggard in the S&P 500. It also weighed heavily on the Nasdaq and the technology sector. The Technology Select Sector SPDR (XLK) declined 0.6%, the second biggest loser among the S&P 500 sectors.

Possibility of a ceasefire between Ukrainian forces and pro-Russian separatists failed to boost the markets. President Vladimir Putin outlined ceasefire plans. However, reports stated that Ukraine's prime minister had rejected the plan.

Coming back to the domestic events, shares of Delta Air Lines Inc. ( DAL ) plunged 5.2% after the company lowered its operating margin for the third quarter and increased its fuel costs outlook. The airliner also declared that its traffic dropped slightly last month.

Shares of other airliners declined on this news. Airline stocks such as American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ) and Southwest Airlines Co. ( LUV ) decreased 3.4%, 1.9% and 1%, respectively.

Economic data was largely encouraging. According to the U.S. Department of Commerce, new orders for manufactured goods surged 10.5% in July. However, this was slightly less than the consensus estimate of 10.6%. This reading follows an increase of 1.5% in June. However, excluding transportation, new orders decreased 0.8% in July. Separately, unfilled orders, shipments and inventories data were up 5.4%, 1.2% and 0.1%, respectively.

Domestic car sales data was positive. Total vehicle sales increased to an annualized rate of 17.5 million in August, well beyond the consensus expectation of a rise to 16.6 million. Domestic-made vehicle sales also climbed to an annualized rate of 14.1 million in August, more than the consensus expectation of an increase to 13.2 million.

The Federal Reserve's Beige Book reported expansion in economic activity in all Federal Reserve Districts. The report further stated that consumer spending growth is positive and jobs growth is modest. However, Fed's Beige Book stated the housing sector lagged the others.

The SPDR S&P Homebuilders (XHB) was the biggest loser among the S&P 500 sectors. The sector declined 1.2%. Key housing stocks from the sector such as Toll Brothers Inc. ( TOL ), PulteGroup, Inc. ( PHM ), KB Home ( KBH ), DR Horton Inc. ( DHI ) and Beazer Homes USA Inc. ( BZH ) decreased 4.7%, 3.8%, 3.3%, 2.5% and 2.8%, respectively. Out of 10 S&P sectors, 5 sectors declined on Wednesday.

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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 Nasdaq, Inc.

This article appears in: Investing US Markets
Referenced Stocks: XLK , XHB , AAPL , DAL , AAL

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