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
Ahead of Wall Street
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%
Shares of Apple Inc. (
) 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.
) 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
Shares of other airliners declined on this news. Airline stocks
such as American Airlines Group Inc. (
), United Continental Holdings, Inc. (
) and Southwest Airlines Co. (
) 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
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 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. (
), PulteGroup, Inc. (
), KB Home (
), DR Horton Inc. (
) and Beazer Homes USA Inc. (
) 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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APPLE INC (AAPL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis
AMER AIRLINES (AAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis
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TOLL BROTHERS (TOL): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
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