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Selling pressure in Internet stocks and a decline in AIG's quarterly income dragged the benchmarks down on Tuesday. While Twitter led the decline among Internet stocks, AIG adversely affected the financial sector. New deals in the health care sector failed to restrict the day's losses. Meanwhile, investors kept an eye on the latest developments in Ukraine. The day's economic reports were limited to March's trade balance, which hardly made an impact on the markets.
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) dropped 0.8% to close Tuesday's trading session at 16,401.02. The Standard & Poor (S&P 500) declined 0.9% to finish at 1,867.72. The tech-laden Nasdaq Composite Index plunged 1.4% to 4,080.76. The fear-gauge CBOE Volatility Index (VIX) went up 3.8% to settle at 13.80. Total volume for the day was roughly 5.9 billion shares, lower than this month's average of 6.2 billion. Declining stocks outnumbered the advancers on the NYSE. For 66% stocks that declined, 30% advanced.
Declines in Internet stocks were primarily due to the 17.8% drop in Twitter, Inc. TWTR. Twitter's shares plunged after the six-month “lock-up” period for almost 500 million shares of the company expired. The lock-up had restricted the sale of about 82% of the social-media company's outstanding stock.
Internet stocks from the Technology sector such as Facebook, Inc. FB, Google Inc. GOOG, Yahoo! Inc. YHOO, Yelp, Inc. YELP and LinkedIn Corporation LNKD plummeted 4.4%, 2.4%, 1.1%, 13.4% and 5.7%, respectively. Overall the Technology Select Sector SPDR XLK decreased 1.1%.
Shares of online retailer Amazon.com Inc. AMZN, Internet television network provider Netflix, Inc. NFLX, online travel company TripAdvisor Inc. TRIP and The Priceline Group Inc. PCLN decreased 4.1%, 5.3%, 3.9% and 1.9%, respectively. Overall the Consumer Discret Select Sector SPDR XLY declined 1.4%.
Also, shares of momentum stocks such as electric car maker Tesla Motors, Inc. TSLA and Internet radio service provider Pandora Media, Inc. P declined 4.3% and 8.9%, respectively.
Bio-tech stocks too suffered heavy losses yesterday. Bio-tech stocks such as Gilead Sciences Inc. GILD, Vertex Pharmaceuticals Incorporated VRTX Amgen Inc. AMGN and Biogen Idec Inc. BIIB decreased 1.9%, 2.7%, 0.8% and 1.4%, respectively.
American International Group, Inc.'s AIG shares plunged 4.1% a day after the company reported lower quarterly income. On a GAAP basis, including extraordinary items, the company reported a quarterly net income of $1.61 billion or $1.09 per share, compared with $2.21 billion or $1.49 per share in the year-ago quarter. The company also posted first-quarter 2014 operating earnings per share of $1.21, which surpassed the Zacks Consensus Estimate of $1.08 but was below the year-ago quarter figure of $1.34. The drop in AIG's share price was a big drag on the financial sector.
The Financial Select Sector SPDR XLF declined 1.4%. Key stocks from the Financial sector such as Wells Fargo & Company WFC, JPMorgan Chase & Co. JPM, Bank of America Corporation BAC and Citigroup Inc. C dropped 0.9%, 1.6%, 2.3% and 1.7%, respectively.
Merger and acquisition activity in the health care sector failed to boost investor sentiment. German drug maker Bayer AG agreed to buy Merck & Co. Inc.'s MRK consumer-products business, including the allergy-treatment Claritin and nasal decongestant Afrin for $14.2 billion. However, shares of Merck dropped 2.6%.
Investors also remained focused on the recent developments in Ukraine where pro-Russian rebels and Ukrainian forces are in constant confrontation. Ukraine's acting President Oleksandr Turchynov named a new commander for the ground forces after the death toll of government troops rose during the “anti-terror” operation in the easternmost cities of Ukraine.
Ukrainian forces on Monday were ambushed by separatists, triggering heavy fighting in the outskirts of Sloviansk; a day after pro-Russian militants attacked a police station in Odessa and freed 67 of their allies.
Meanwhile, French President Francois Hollande stated that Europe will continue to put pressure on Russian President Vladimir Putin to let Ukraine conduct the presidential election on May 25.
On the economic front, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce reported that trade deficit had narrowed in March. Goods and services deficit had narrowed to $40.38 billion in March from $41.87 billion in February. However, the consensus expected the trade deficit to narrow to $40.10 billion. Exports in March improved $3.9 billion to $193.9 billion, while imports increased $2.5 billion to $234.3 billion.
Nine out of 10 sectors of the S&P 500 ended in the red. The SPDR S&P Homebuilders ETF XHB led the decline among the S&P 500 sectors. The sector dropped almost 2.0%. Key housing stocks such as PulteGroup, Inc. PHM, Lennar Corp. LEN and DR Horton Inc. DHI decreased 1.3%, 1.6% and 2.4%, respectively.
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) dropped 0.8% to close Tuesday's trading session at 16,401.02. The Standard & Poor (S&P 500) declined 0.9% to finish at 1,867.72. The tech-laden Nasdaq Composite Index plunged 1.4% to 4,080.76. The fear-gauge CBOE Volatility Index (VIX) went up 3.8% to settle at 13.80. Total volume for the day was roughly 5.9 billion shares, lower than this month's average of 6.2 billion. Declining stocks outnumbered the advancers on the NYSE. For 66% stocks that declined, 30% advanced.
Declines in Internet stocks were primarily due to the 17.8% drop in Twitter, Inc. TWTR. Twitter's shares plunged after the six-month “lock-up” period for almost 500 million shares of the company expired. The lock-up had restricted the sale of about 82% of the social-media company's outstanding stock.
Internet stocks from the Technology sector such as Facebook, Inc. FB, Google Inc. GOOG, Yahoo! Inc. YHOO, Yelp, Inc. YELP and LinkedIn Corporation LNKD plummeted 4.4%, 2.4%, 1.1%, 13.4% and 5.7%, respectively. Overall the Technology Select Sector SPDR XLK decreased 1.1%.
Shares of online retailer Amazon.com Inc. AMZN, Internet television network provider Netflix, Inc. NFLX, online travel company TripAdvisor Inc. TRIP and The Priceline Group Inc. PCLN decreased 4.1%, 5.3%, 3.9% and 1.9%, respectively. Overall the Consumer Discret Select Sector SPDR XLY declined 1.4%.
Also, shares of momentum stocks such as electric car maker Tesla Motors, Inc. TSLA and Internet radio service provider Pandora Media, Inc. P declined 4.3% and 8.9%, respectively.
Bio-tech stocks too suffered heavy losses yesterday. Bio-tech stocks such as Gilead Sciences Inc. GILD, Vertex Pharmaceuticals Incorporated VRTX Amgen Inc. AMGN and Biogen Idec Inc. BIIB decreased 1.9%, 2.7%, 0.8% and 1.4%, respectively.
American International Group, Inc.'s AIG shares plunged 4.1% a day after the company reported lower quarterly income. On a GAAP basis, including extraordinary items, the company reported a quarterly net income of $1.61 billion or $1.09 per share, compared with $2.21 billion or $1.49 per share in the year-ago quarter. The company also posted first-quarter 2014 operating earnings per share of $1.21, which surpassed the Zacks Consensus Estimate of $1.08 but was below the year-ago quarter figure of $1.34. The drop in AIG's share price was a big drag on the financial sector.
The Financial Select Sector SPDR XLF declined 1.4%. Key stocks from the Financial sector such as Wells Fargo & Company WFC, JPMorgan Chase & Co. JPM, Bank of America Corporation BAC and Citigroup Inc. C dropped 0.9%, 1.6%, 2.3% and 1.7%, respectively.
Merger and acquisition activity in the health care sector failed to boost investor sentiment. German drug maker Bayer AG agreed to buy Merck & Co. Inc.'s MRK consumer-products business, including the allergy-treatment Claritin and nasal decongestant Afrin for $14.2 billion. However, shares of Merck dropped 2.6%.
Investors also remained focused on the recent developments in Ukraine where pro-Russian rebels and Ukrainian forces are in constant confrontation. Ukraine's acting President Oleksandr Turchynov named a new commander for the ground forces after the death toll of government troops rose during the “anti-terror” operation in the easternmost cities of Ukraine.
Ukrainian forces on Monday were ambushed by separatists, triggering heavy fighting in the outskirts of Sloviansk; a day after pro-Russian militants attacked a police station in Odessa and freed 67 of their allies.
Meanwhile, French President Francois Hollande stated that Europe will continue to put pressure on Russian President Vladimir Putin to let Ukraine conduct the presidential election on May 25.
On the economic front, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce reported that trade deficit had narrowed in March. Goods and services deficit had narrowed to $40.38 billion in March from $41.87 billion in February. However, the consensus expected the trade deficit to narrow to $40.10 billion. Exports in March improved $3.9 billion to $193.9 billion, while imports increased $2.5 billion to $234.3 billion.
Nine out of 10 sectors of the S&P 500 ended in the red. The SPDR S&P Homebuilders ETF XHB led the decline among the S&P 500 sectors. The sector dropped almost 2.0%. Key housing stocks such as PulteGroup, Inc. PHM, Lennar Corp. LEN and DR Horton Inc. DHI decreased 1.3%, 1.6% and 2.4%, respectively.
AMAZON.COM INC AMZN: Free Stock Analysis Report
FACEBOOK INC-A FB: Free Stock Analysis Report
GILEAD SCIENCES GILD: Free Stock Analysis Report
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NETFLIX INC NFLX: Free Stock Analysis Report
PANDORA MEDIA P: Free Stock Analysis Report
PRICELINE.COM PCLN: Free Stock Analysis Report
TRIPADVISOR INC TRIP: Free Stock Analysis Report
TESLA MOTORS TSLA: Free Stock Analysis Report
TWITTER INC TWTR: Free Stock Analysis Report
VERTEX PHARM VRTX: Free Stock Analysis Report
YELP INC YELP: Free Stock Analysis Report
YAHOO! INC YHOO: Free Stock Analysis Report
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