Stock Rally Takes A Breather On Concerns About Valuations, Growth Prospects


After yesterday's rally ran out of steam at record highs, stock futures are trading in negative turf this morning, with investors still spooked by yesterday's warning from billionaire investor Carl Icahn and lofty levels that suggest the equity markets are overbought in light of global growth forecasts. Last night, the Organization for Economic Cooperation and Development cut its global growth forecasts to 3.6% from 4.0% for 2014 due to weakness in emerging markets and another looming budget crisis in the U.S.

Although Asian markets were supported early on by economic reform efforts in China, overseas bourses were all trading in the red in sympathy with yesterday's pre-close sell-off in the U.S. and weakness in the UK banking and mining sector.

The economic data was light with only the Q3 Employment Cost Index which reported a modest decline to 0.4% from 0.5% the quarter prior. More Fed-speak is on tap with Charles Evans (voting, dovish) at 2:15ET and Chairman Bernanke delivering a speech to the National Association of Business Economics at 7:00ET.

-Dow Jones Industrial down 0.30%

-S&P 500 futures down 0.31%

-Nasdaq 100 futures down 0.19%


Nikkei down 4.00%

Hang Seng down 1.53%

Shanghai Composite down 0.67%

FTSE-100 down 0.74%

DAX-30 down 032%


(+) Large cap tech: higher

(+) Chip stocks: higher

(-) Software stocks: lower

(+/-) Hardware stocks: mixed

(+) Internet stocks: higher

(+/-) Drug stocks: mixed

(+/-) Financial stocks: mixed

(+/-) Retail stocks: mixed

(-) Industrial stocks: lower

(+) Airlines: higher

(+/-) Autos mixed


SPEX (+29.39%) Spherix's CompuFill LLC subsidiary has entered into a settlement and license agreement with a leading technology company.

HZNP (+25.28%) Entered into note purchase agreements with investors to issue $150 million aggregate principle and agreed to buy the U.S. rights for Pozen Inc VIMOVO delayed-release tablets.

HD (+3.24%) Reports Q3 sales of $19.5 bln, better than the analyst consensus of $19.16 bln on Capital IQ. EPS was $0.95, vs. expectations of $0.89 per share.


LITB (-23.75%) Despite upbeat Q3 earnings, the company expects Q4 net revenue to be between $75.0 million and $77.0 million, versus the consensus estimate of $83.0 million.

TSLA (-2.39%) The National Highway Traffic Safety Administration has opened a formal inquiry into safety-related issues in the Model S electric car.

BBY (-5.88%) Despite better than expected Q3 earnings, Best Buy warned that a more competitive environment, especially from Wal-Mart, could hurt Q4 gross margin as the company seeks to compete on price.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks:

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