Stock Market News for March 11, 2015 – Zacks Investment Research
Benchmarks suffered huge losses on Tuesday as rate hike fears strengthened the U.S. dollar to a multi-year high against major currencies including the euro. Last week’s strong U.S. job numbers injected fears among investors that the Fed may raise interest rate sooner-than-expected. Moreover, stronger dollar had a negative impact on oil prices yesterday. The blue-chip index witnessed its biggest one-day loss in five months in terms of points.
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The Dow Jones Industrial Average (DJI) slumped 1.9%, or 332.78 points, to close at 17,662.94. The Standard & Poor’s 500 (S&P 500) plunged 1.7% to 2,044.16. The tech-laden Nasdaq Composite Index closed at 4,859.80; also losing 1.7%. The fear-gauge CBOE Volatility Index (VIX) jumped 10.8% to settle at 16.69. A total of about 3.67 billion shares were traded on Tuesday on NYSE. Decliners outpaced advancing stocks on the NYSE. For 71% stocks that declined, 27% advanced.
On Tuesday, euro witnessed another decline of nearly 1.4% against the U.S. dollar to drop to $1.07. Euro plunged to its lowest level in almost 12 years. Concerns that an interest rate hike was in the offing combined with ECB’s monetary easing program, leading to the plunge. Investors anticipated that the Fed will consider a rate hike in second half of this year as strong jobs data on domestic front suggested that labor market is improving at an impressive rate. The Bureau of Labor Statistics (BLS) reported last Friday that the U.S. economy created a total of 295,000 jobs in February. Moreover, the unemployment rate went down to six and a half year low figure of 5.5% last month.
Meanwhile, the European Central Bank’s (ECB) quantitative easing program that got underway on Monday also weighed on the euro. The program has pushed Eurozone bond yields to their lowest levels ever. Short-term German government bond yields are in negative territory. ECB President Mario Draghi had already said the ECB would purchase these bonds even if they have a negative yield. As announced in January, ECB will buy government bonds worth 60 billion euros a month through a quantitative easing program. Meanwhile, the stronger dollar dragged down yields on 10-year U.S. Treasury notes by seven basis points to 2.12%.
Additionally, strengthening U.S. dollar also weighed on oil prices yesterday. The prices of WTI crude oil and Brent crude oil plunged 3.5% and 3.8% to $48.29 per barrel and $56.39 a barrel, respectively. Slump in oil prices had a negative impact on the Energy Select Sector SPDR (XLE), which declined 1.4% on Tuesday. Key energy stocks including EOG Resources, Inc. (EOG – Analyst Report), Chevron Corporation (CVX – Analyst Report), Exxon Mobil Corporation (XOM – Analyst Report) and Marathon Oil Corporation (MRO – Analyst Report) declined 1.7%, 1%, 1.1% and 1.8%, respectively.
Separately, the Financial Select Sector SPDR (XLF) was the biggest loser among the S&P 500 sectors. The sector declined more than 2.1% on Tuesday. Key financial stocks including Citigroup Inc. (C – Analyst Report), Wells Fargo & Company (WFC – Analyst Report), Bank of America Corporation (BAC – Analyst Report) and JPMorgan Chase & Co. (JPM – Analyst Report) declined 3.3%, 2.5%, 2.4% and 2.5%, respectively. All the 10 S&P 500 sectors registered losses on Tuesday.
On earnings front, shares of Barnes & Noble, Inc. (BKS – Snapshot Report) plunged 10.1% after reporting fiscal third quarter earnings per share of 93 cents, significantly missing the Zacks Consensus Estimate of $1.19. However, Urban Outfitters Inc.’s (URBN – Analyst Report) shares surged 11.5% after announcing fourth quarter earnings per share of 60 cents, beating the Zacks Consensus Estimate by 3 cents. Moreover, total net sales of Urban Outfitters climbed 11.6% to $1,011 million during the quarter from the year-ago level. It also came higher than the Zacks Consensus Estimate of $1,005 million.
Originally posted here:
Stock Market News for March 11, 2015 – Zacks Investment Research
