Stock Market News for December 17, 2014 – Zacks Investment …
Benchmarks ended in the red for the third-straight session after volatile trading on Tuesday. A nosedive in Russian ruble raised worries about the global economy. Ruble slumped despite Russian central bank hiking interest rates to 17%. Moreover, uncertainty regarding the rate hike in the US ahead of the Federal Open Market Committee meeting also dented investor sentiment. Decline in technology and consumer discretionary shares also resulted in some losses. However, a marginal recovery in oil prices limited some of the day’s losses.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) declined 0.7%, or 111.97 points, to close at 17,068.87. The Standard & Poor 500 (S&P 500) lost almost 0.9% to close at 1,972.74. The tech-laden Nasdaq Composite Index closed at 4,547.83; decreasing 1.2%. The fear-gauge CBOE Volatility Index (VIX) rose 15.4% to settle at 23.57. A total of about 9.3 billion shares were traded on Tuesday, higher than this month’s average of 7.1 billion. Decliners outpaced advancing stocks on the NYSE. For 56% stocks that declined, 41% advanced.
On Tuesday, the Russian ruble slumped to a record low as the unexpected interest rate hike failed to boost the currency. At 1 AM Moscow time Tuesday, the Central Bank of Russia hiked the benchmark interest rate from 10.5% to 17%. This was the biggest single hike since 1998. Soon afterward, one-month Ruble forwards improved 1.6% in Asian trading. However, the positive run could not last long and ruble slumped to a historic low by Tuesday noon. Seeing the rate hike as a panic move, investors were dumping Russian assets, pushing the exchange value of the ruble to a new low versus the dollar.
Moreover, investors also remained cautious about the Federal Open Market Committee (FOMC) meeting. A statement will be released on Wednesday, where investors are looking forward to get a definite indication on rate hike. Investors also remained uncertain about the fact whether the Fed will maintain the interest rate at near zero level for ‘considerable time’, or hike the same based on positive economic indicators.
Also, a significant decline in technology shares negatively impacted the Nasdaq on Tuesday. Key technology shares including Google Inc. (GOOGL – Analyst Report), Microsoft Corporation (MSFT – Analyst Report), Apple Inc. (AAPL – Analyst Report), Yahoo! Inc. (YHOO – Analyst Report) and Amazon.com Inc. (AMZN – Analyst Report) declined 3.4%, 3.2%, 1.4%, 2% and 3.6%, respectively.
Additionally, the Consumer Discretionary Select Sector SPDR (XLY) fell more than 1.5% on Tuesday and was the worst performer among the S&P 500 sectors. Key stocks from the sector including Best Buy Co., Inc. (BBY – Analyst Report), The Home Depot, Inc. (HD – Analyst Report), Macy’s, Inc. (M – Analyst Report) and The Gap, Inc. (GPS – Analyst Report) declined 3.1%, 3%, 1.8% and 1.4%, respectively. Eight out of 10 S&P 500 sectors registered losses on Tuesday.
However, after witnessing high volume of volatility, the price of WTI crude oil finished in positive territory by gaining a couple of cents to $55.93 per barrel. But the price of Brent crude continued to decline on Tuesday. The price dropped 2% to $59.86 per barrel. This recovery in the price of WTI crude oil had a positive impact on the Energy Select Sector SPDR (XLE). The sector gained 0.9% on Tuesday and was the biggest gainer among the S&P 500 sectors. Key energy stocks including Marathon Oil Corporation (MRO – Analyst Report), Chesapeake Energy Corporation (CHK – Analyst Report), Chevron Corporation (CVX – Analyst Report) and Cabot Oil & Gas Corporation (COG) rose 2.1%, 1.3%, 0.8% and 1.4%, respectively.
Separately, shares of Talisman Energy Inc. (TLM) surged 48.1% following its confirmation of being acquired by Repsol S.A. (REPYY). The company announced that the deal involves an all-cash transaction, and the per-share price of the takeover is $8 or C$9.33, a 75% premium to Talisman’s 7-day average closing price. Total value of the transaction is about $13 billion, including Talisman’s current debt of about $4.7 billion.
Originally posted here:
Stock Market News for December 17, 2014 – Zacks Investment …
