Market Indexes Extend Decline on Cautious Economic Outlook

Nichole Harper
14 Aug, 2013
New York City

U.S. indexes traded lower and wholesale price index was unchanged in July and core price index increased 0.1%. Gold price increase 0.9%. Apple Inc extended 3-day rally to 11% after Carl Icahn announced a stake of $1 billion. Steinway Musical agreed to go private for $512 million.

[R]2:35 PM New York – U.S. indexes traded lower and wholesale price index was unchanged in July and core price index increased 0.1%. Gold price increase 0.9%. Apple Inc extended 3-day rally to 11% after Carl Icahn announced a stake of $1 billion. Steinway Musical agreed to go private for $512 million.[/R]

U.S. stocks traded lower on the growing speculation that the Fed will conduct its stimulus tapering program from September as economies around the world gather momentum.

U.S. wholesale price index was unchanged in July following 0.8% increase in June, a Labor Department report showed today.

In trading, S&P 500 index declined 8.05 to 1,686.11 and Nasdaq Composite Index fell 11.16 to 3,673.28.

European Markets

In Europe, gross domestic product increased 0.3% in the second quarter ending in June ending recession in the euro zone. The economies in the euro-zone contracted 0.3% in the previous quarter.

In the June quarter, German economy expanded at 0.7% and French gross domestic product increased 0.5%. Portugal recorded its first quarterly increase of 1.1% after economy shrank for ten quarters in a row.

In London, FTSE 100 index decreased 0.4% and in Frankfurt DAX index added 0.3% and in Paris CAC 40 index gained 0.5%.

U.S. Stocks in Review

Apple Inc ((AAPL)) increased 3% and extended its 3-day gain to 11% ahead of the company announcement that may lead to higher stock buyback and dividend plan and new products release next month.

Activist investor Carl Icahn who has a history of pushing shareholder interest ahead of company and customer and other stakeholder interest announced stake in the company worth $1 billion.

Brocade Communications Systems Inc ((BRCD)) soared 14% after the networking equipment maker reported third-quarter profit ahead of estimates.

Cree (CREE)) plummeted 19% after the maker of energy-efficient lighting products said earnings in the first quarter will not exceed 41 cents a share, lower than estimates of as much as 43 cents a share.

JDS Uniphase Corp ((JDSU)) decreased 2% after the maker of network and telecom analytics and optical components estimated lower than expected first-quarter earnings.

Home builders declined after yields on U.S. Treasuries neared the high in the year. PulteGroup Inc ((PHM)) declined 2% and D.R. Horton Inc ((DHI)) fell 2%.

Macy’s ((M)) declined 4% after the department store chain lowered its full-year outlook and said sales in the second quarter were weaker than expected.

Steinway Musical Instruments Inc ((LVB)) soared 8% after the company agreed to be acquired for $512 million by Paulson & Co, the hedge fund owned by billionaire John Paulson.

U.S. Airways Group Inc ((LCC)) decreased 1.5% and extended its two-day slump to 15% after the U.S. Justice Department said it proposes to challenge its merger plan with American Airlines.