Small-cap Selloff Resumes As Us Stocks Retreat
US stocks retreated today, after benchmark indexes closed at all-time highs for a second consecutive day, and amid a renewed selling in small-cap and Internet shares.
Wednesday, May 14, 2014 - 00:00
Groupon sank 4.6% to lead the Dow lower by 1.1%, Fossil Group Inc. fell 8.9% after the maker of watches and accessories forecast earnings that trailed analysts’ estimates, Deere & Co. slid 2% after cutting its full-year revenue projection and IBM lost 1.6% to pace declines among large companies. Just after 3PM in New York the S&P 500 had dropped 0.5% to 1,888.66. The Dow lost 95.27 points, or 0.6%, to 16,620.17, halting a five-day rally, and the Russell 2000 Index of small stocks sank 1.4% after yesterday sliding 1.1%.
Benchmark government bond yields in both the United States and Germany fell this afternoon after sources said a European Central Bank rate cut next month is "more or less a done deal.” Euro zone sources said the ECB plans a package of policy options, including measures aimed at boosting lending to small- and mid-sized firms. The ECB's dovishness has helped hold down yields on German and US debt, though the expectation is stronger US growth will result in a rise in those yields over time.
Federal Reserve Chair Janet Yellen will speak tomorrow after saying last week the world’s biggest economy still requires a strong dose of stimulus. She told US lawmakers that while data shows “solid growth” in the second quarter, “many Americans who want a job are still unemployed” and inflation remains low. Three rounds of monetary stimulus have helped fuel economic growth, sending the S&P 500 surging as much as 180% from its 2009 low. Macy’s Inc., Wal-Mart Stores Inc. and Kohl’s Corp. are among 12 companies in the S&P 500 scheduled to disclose results this week, giving investors insight into how retailers performed during the winter months.
This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.