U.S. Indexes Decline on Internet and Biotech Stocks Retreat

Nichole Harper
08 Jul, 2014
New York City

Stocks on Wall Street edged lower ahead of earnings season and worries linked to stretched valuation. AbbVie revised its offer for UK listed Shire Plc for the third time and offered $51 billion.

[R]1:30 PM New York – Stocks on Wall Street edged lower ahead of earnings season and worries linked to stretched valuation. AbbVie revised its offer for UK listed Shire Plc for the third time and offered $51 billion.[/R]

Stocks on Wall Street turned lower after investors worried of stretched valuation and biotech stocks led the decline.

S&P 500 index declined 14.98 or 0.8% to 1,962.69 and Nasdaq Composite Index dropped 66.04 or 1.47% to 4,386.47.

Tollbooth Index slipped 1.08% or 103.01 to 9,403.42.

European Markets

In London trading, FTSE 100 index slumped 0.9% or 59.43 to 6,764.08 and in Frankfurt the DAX index declined 0.9% or 84.88 to 9,821.19.

In Paris, CAC 40 index dropped 1% or 43.23 to 4,362.53.

Air France – KLM plunged 8.8% to €8.57 after the airline company revised its outlook for operating earnings for the year between €2.2 billion and €2.3 billion while earnings are expected to rise more than 20% from 2013.

Marks and Spencer Group Plc slipped 1.4% to 427 pence after the U.K.-based specialty retailer said group sales in the first-quarter ending on June 28 jumped 2.3%.

The retailer said UK total sales increased 2% and total sales in apparel segment edged up 0.1%. General merchandise total sales dropped 0.8% and international sales climbed 4.7% and sales in food segment jumped 4.2%.

Same-store sales of general merchandise including apparel slipped 1.5%.

Asian Markets

Stocks in Tokyo edged lower and current account surplus in May climbed and Asian markets closed mixed.

The Ministry of Finance said current account surplus in May climbed to 522.8 billion yen from 187.4 billion yen in April while declined 7.7% from a year earlier. The trade balance reflected a deficit of 675.9 billion yen following the deficit of 780.4 billion yen in the last month.

Exports jumped 2% to 5.72 trillion yen while imports eased 0.4% for the first time in 19 months to 6.394 trillion yen.

The May trade deficit tumbled 16.9% to 675.9 billion yen, shrank by 137.9 billion yen from a year ago.

The Nikkei 225 Stock Average slipped 65.03 or 0.4% to 15,314.41 and the broader Topix index fell 4.17 to 1,275.70.

In Mumbai trading, the Sensex Index declined 517.97 or 2% to close at 25,582.11 The CNX Nifty slumped 163.95 or 2.1% to 7,623.20

The generic drug maker Cipla plans to invest up to £100 million in U.K. Hero Motocorp plans to set up a manufacturing facility in Colombia and invest $70 million.

The bond rating services provider ICRA said quarterly net surged 32%.

Reliance Industries, controlled by billionaire Mukesh Ambani acquired Network 18 Media and TV18 after the operator of financial channel struggled with its mounting debt.

U.S. Stocks in Review

AbbVie Inc ((ABBV)) dropped 2.7% or $1.56 to $55.85 after the drug-maker increased its revised takeover offer to U.K.-based specialty biopharmaceutical company Shire Plc for about $51.5 billion or £30.1 billion.

AbbVie increased its proposal to £22.44 in cash and 0.8568 ordinary shares of new share for each share of Shire’s.

Delta Air Lines, Inc ((DAL)) declined 4.1% or $1.51 to $35.39 after the air passengers and cargo operator reduced its flights on disagreement with the Venezuela government held airline receipts.

Mylan Inc ((MYL)) slipped 50 cents to $50.06 after the pharmaceutical company launched a generic version of hypertension tablet that lowers blood pressure.

Mylan received final approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application for the the treatment of hypertension.