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WALL STREET
08:30 29 Dec 2016
US stocks sag but Kate Spade rockets
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MarketTopic Synopsis:
US stocks dropped on Wednesday, like the hangover after a good party, with
the Dow slipping even further from reaching the 20,000 level this year.
Although the volumes were still holiday-thinned, the price action was harsh.
The S&P 500 market behemoth was down 0.8% at 2249 and led by Nvidia
Corporation (NASDAQ:NVDA), down 6.7% to $109.44, as profit-taking ensued,
while the S&P Midcap 400 dropped by 1.1% to 1662 and was led by another
profit-taking hit stock, Advanced Micro Devices (NASDAQ:AMD), down 4.3% to
$11.55.
A
look
at
the
US
markets.
Author:
George Matlock
+44(0)1202770386
[email protected]
The Dow ended down 0.6% at 19,833 - 150 points shy of its best level of the day when it hit 19,981 and looked like it
might just clinch 20,000, a record.
The Nasdaq Composite also slid from Tuesday's record level and ended down 0.9% at 5438.
The S&P Smallcap 600 which outperformed larger cap stocks on Tuesday, took the brunt of losses and was down 1.2%
at 839 and led by Geospace Technologies (NASDAQ:GEOS), down 9.1% to $20.13.
One stock which fared well in the S&P 400 was fashion house Kate Spade & Company (NYSE:KATE), up 23.6% to
$17.93 on volume of 22mln shares, following a report that the company is exploring a sale. The stock had previously
been halted twice in earlier trade due to volatility.
The company is working with a bank to contact possible buyers, Dow Jones Newswires reported, citing sources.
Early trading
US stocks attempted to mark fresh record highs on Wednesday but were beaten back by low volumes, profit-taking and
a surprise drop in home sales which even a record high on London's FTSE 100 was unable to shield.
A total of 72% of NYSE stocks were lower this session, versus only 28% higher. Identically on Nasdaq, but on the
American Exchange 58% of stocks were lower and 42% gained.
US pending home sales in November were expected to rise 0.5% month-on-month. Instead, they dropped by 2.5%. On
the year, sales were 0.4% lower versus a rise of 1.8% in the year to October. The data will sour the Trump heyday rally
that followed the election of Donald Trump as the next US President and led to a boost to consumer and business
confidence and a rally by the bourse in the past seven weeks.
The S&P 500 market behemoth was down 0.4% at 2260 as Tuesday's top riser became Wednesday's biggest faller:
Nvidia Corporation (NASDAQ:NVDA), down 6.5% to $109.90 on profit-taking. Inside an hour's trading the stock had
seen volumes well above the average for the market. A total of 15mln shares had changed hands - one third of its total
volumes on Tuesday when it had rallied.
The Nasdaq, which marked a record high of 5,512 on Tuesday, failed to scale 5,500 at the opening and was last down
0.6% at 5457. The Dow which had high hopes of hitting a milestone 20,000 threatened at 19,981 but has since slipped
into negative territory and was last seen down 0.1% at 19.927.
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The S&P Midcap 400 was down 0.5% at 1672 and led by Advanced Micro Devices (NASDAQ:AMD), down 4.5% at
$11.52. Again, the stock which had led the ticker on Tuesday was now the biggest faller. On Tuesday, the stock had
advanced by 4.1%.
The S&P Smallcap 600 was down 0.7% at 844. The biggest riser on Tuesday it too felt the heat of profit-taking before
the end of the calendar year. Top faller was Geospace Technologies Corp (NASDAQ:GEOS) down 5.3% at $20.96. It
came a day after the stock was upgraded by Zacks Investment Research from a "sell" rating to a "hold" rating.
Pre-Open
US stocks are pointing to a fresh rally on Wednesday and one sufficient to see the Dow Jones Industrial Average pierce
above a record 20,000 as well as Nasdaq to post a fresh peak.
It would be a major milestone for 2016, and cement a quarter of growth for the bourse which saw record upon record
reached - especially after the election of pro-business Donald Trump as the next US President on Nov. 8.
Technical analysts already expect huge gains to be realisable early in 2017. Read more.
The S&P 500 market behemoth is forecast to rise by 0.2% while the Nasdaq Composite, which hit a record high of
5,512.37 on Tuesday before closing up 0.5% at 5,487, could advance 0.3%. The Dow is seen rising by 0.2% or 38
points. Should it rise by 55 points, it would break above 20,000 at the opening. It closed at 1`9,945.04 on Tuesday
having at one point been 20 points from 20,000 intraday.
Meanwhile, London's blue-chip FTSE 100 was already at a fresh record high of 7,109.27, up 0.6%. London shares were
closed on Tuesday for a holiday.
But some stocks will have a dismal start to the day.
Qualcomm (NASDAQ:QCOM) is facing an $865mln fine in South Korea.
Qualcomm said the Korea Fair Trade Commission issued the penalty after finding it had violated the country's
competition law.
The technology firm called the ruling "unprecedented and insupportable" and said it "lacks a coherent theory of
competition law violations." Shares were down 1.1% at $66.51 pre-market.
Investors may not be thrilled with the latest news from Boeing (NYSE:BA) and Airbus (NASDAQ:EADSF).
Airbus is delaying the delivery of 12 double-decker A380 aircraft to Emirates. This comes after the company warned this
year that it would scale back production of the super jumbo because of weak demand.
Shares in Airbus dipped by about 0.6% on Wednesday in Paris.
Meanwhile, Delta (NYSE:DAL) announced Tuesday afternoon that it has canceled an order for 18 Boeing 787
Dreamliners that was inherited as part of its merger with Northwest Airlines. Boeing shares were down 0.2% at $157.25
pre-market.
In data, the National Association of Realtors releases November data on pending home sales at 1000 ET (1500 GMT).
November pending home sales are forecast to have risen by 0.5%. But with consumer and business cvonfdience on the
rise, prospects for an overshoot are growing.
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