News Column

Coutts-US close: Correction concerns curbed as tech stocks provide boost

June 11, 2014



ENP Newswire - 11 June 2014

Release date- 10062014 - US close: Correction concerns curbed as tech stocks provide boost.

Indices tread water until late gain - Tech stocks provide boost - Concern of correction only weigh slightly so far... Dow Jones Industrials: +0.02% Nasdaq Composite: +0.04% S&P 500: -0.02% Having scorched to a succession of highs in recent weeks, US indices cooled their heels until just prior to Tuesday's close, helped by a scarcity of macroeconomic or corporate newsflow. The Dow Jones squeezed out another record close, however, to finish up 2.82 points or 0.02% at 16,945.92.

The tech-heavy Nasdaq fared marginally well, crawling 1.75 points or 0.04% higher to close at exactly 4,338.00.

The Standard & Poors 500 dipped by a minimal 0.48 points or 0.02% to 1,950.79, ending its four-day winning run. Strong performances from tech stocks may have been behind a late surge, helping investors ignore some concerns that a correction lower might be looming.

The Chicago Board of Trade's VIX index for implied volatility for options contracts on the S&P 500, hit seven-year lows just last Friday, indicating a periods of calm that historically had presaged stock market corrections.

Capital Economics wrote to clients on Tuesday explaining that low levels of volatility in financial markets reflect a high degree of confidence in the ability of the authorities to prevent crises and respond to shocks, expectations that any policy changes will be gradual, and a reduction in economic instability.

'Unfortunately, none of these factors can be taken for granted.

What's more, extended periods of low volatility can themselves increase the chances of a crash.' However, while they see many possible risk factors, they admitted that 'there are no obvious triggers on the horizon for a major correction'.

Perhaps as if to underline their words, Uruguay - which has the second lowest investment grade rating from Moody's - was planning to sell 36-year bonds.

Furthermore, the Financial Times cited hedge fund manager Stephen Jen, one of the co-founders of SLJ Macro Partners, as laying part of the blame for such low volatility at the feet of tougher bank regulations, which have increased the cost of trading. Light day on the economic front Job openings jumped by 4,455 in April after 4,166 openings in March.

Analysts had predicted a 4,050 gain. The National Federation of Independent Business' small-business optimism index increased to 96.6 last month from 95.2 in April, beating forecasts for a reading of 96.2. Facebook gains at eBay's expense eBay declined slightly after saying David Marcus will step down as the head of its PayPal unit to join Facebook.

Facebook advanced on the news, with Marcus taking a newly created role to head up Facebook's Messenger service within its social network as well as the free Messenger mobile app. Other internet and tech stocks also gained, with LinkedIn up 4.7%, Twitter up 2.6% and Apple 2.2% higher to a new 52-week high, boosted by reinvigorated analyst confidence of late.

RadioShack Corp.

slumped on Tuesday after reporting a wider quarterly loss.

Like many specialist retailers, the electronics specialist is battling structural issues, as shoppers increasingly either buy online or at larger outlets with more pricing power such as Best Buy, said analysts. Also falling was Tyson Foods, as its takeover offer of $63 per share for rival Hillshire Brands proved to be the winning blow in a frenzied bidding battle.

Many believe that Tyson has significantly overpriced its target and could find it difficult to justify the valuation in the long run. Allergan Inc.

edged higher as the Botox maker's board unanimously rejected a $53bn takeover from Valeant.

Molson Coors Brewing Co.

gained as the North American beer company reported a jump in first quarter earnings.

Slot machine maker International Game Technology continued its rise - topping the S&P on the day - after news emerged on Monday that it had hired investment banks to explore a potential sale. Yields climb higher The 10-year Treasury yield rose four basis points to 2.64% - the highest level in a month as Treasury prices fell Tuesday. West Texas Intermediate crude futures fell $0.06 to $104.35 per barrel, according to the ICE.

The barrel broke $105 in intraday trading for the first time since March on speculation that the government will report on Wednesday that US supplies fell for a second week, according to Bloomberg. S&P 500 - Risers International Game Technology (IGT) $14.40 +9.17% Analog Devices Inc.

(ADI) $55.79 +5.88% Molson Coors Brewing Co.

Class B (TAP) $70.71 +5.36% Facebook Inc.

(FB) $65.76 +4.58% Citrix Systems Inc.

(CTXS) $64.15 +3.37% Salesforce.Com Inc.

(CRM) $53.06 +2.61% Electronic Arts Inc.

(EA) $35.70 +2.44% Vulcan Materials Co.

(VMC) $64.91 +2.38% Monster Beverage Corp (MNST) $69.90 +2.37% Apple Inc.

(AAPL) $94.25 +2.20% S&P 500 - Fallers Cognizant Technology Solutions Corp.

(CTSH) $47.47 -4.74% C.R.

Bard Inc.

(BCR) $141.05 -4.73% Tyson Foods Inc.

(TSN) $36.07 -3.81% Urban Outfitters Inc.

(URBN) $33.39 -3.72% Gilead Sciences Inc.

(GILD) $79.54 -3.46% Coach Inc.

(COH) $39.58 -3.06% Range Resources Corp.

(RRC) $89.50 -2.97% eBay Inc.

(EBAY) $48.25 -2.92% Valero Energy Corp.

(VLO) $53.30 -2.81% Sears Holdings Corp.

(SHLD) $40.02 -2.34% Dow Jones I.A - Risers Merck & Co.

Inc.

(MRK) $58.49 +0.95% Johnson & Johnson (JNJ) $104.10 +0.85% JP Morgan Chase & Co.

(JPM) $57.90 +0.84% Visa Inc.

(V) $214.25 +0.79% Chevron Corp.

(CVX) $125.34 +0.78% Cisco Systems Inc.

(CSCO) $25.00 +0.68% Caterpillar Inc.

(CAT) $109.31 +0.51% Pfizer Inc.

(PFE) $29.50 +0.51% Travelers Company Inc.

(TRV) $95.10 +0.46% Coca-Cola Co.

(KO) $41.07 +0.39% Dow Jones I.A - Fallers International Business Machines Corp.

(IBM) $184.29 -1.04% Walt Disney Co.

(DIS) $84.75 -0.85% United Technologies Corp.

(UTX) $119.13 -0.80% Boeing Co.

(BA) $137.25 -0.51% Wal-Mart Stores Inc.

(WMT) $76.62 -0.51% McDonald's Corp.

(MCD) $100.88 -0.49% Nike Inc.

(NKE) $76.31 -0.47% Microsoft Corp.

(MSFT) $41.11 -0.39% American Express Co.

(AXP) $95.28 -0.30% 3M Co.

(MMM) $144.97 -0.24% Nasdaq 100 - Risers Analog Devices Inc.

(ADI) $55.79 +5.88% Facebook Inc.

(FB) $65.76 +4.58% Illumina Inc.

(ILMN) $175.40 +3.82% Citrix Systems Inc.

(CTXS) $64.15 +3.37% Activision Blizzard Inc.

(ATVI) $21.45 +2.53% Monster Beverage Corp (MNST) $69.90 +2.37% Baidu Inc.

(BIDU) $176.14 +2.20% Apple Inc.

(AAPL) $94.25 +2.20% Whole Foods Market Inc.

(WFM) $41.87 +1.76% Intuitive Surgical Inc.

(ISRG) $377.60 +1.71% Nasdaq 100 - Fallers Keurig Green Mountain Inc (GMCR) $115.38 -5.48% Cognizant Technology Solutions Corp.

(CTSH) $47.47 -4.74% Gilead Sciences Inc.

(GILD) $79.54 -3.46% eBay Inc.

(EBAY) $48.25 -2.92% Alexion Pharmaceuticals Inc.

(ALXN) $166.90 -1.94% CA Inc.

(CA) $28.86 -1.67% Ross Stores Inc.

(ROST) $67.70 -1.48% Tesla Motors Inc (TSLA) $202.30 -1.47% Autodesk Inc.

(ADSK) $54.08 -1.44% Regeneron Pharmaceuticals Inc.

(REGN) $309.47 -1.36% OH


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Source: ENP Newswire


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