Market Monitoring – 26 November 2013

Edited by Vani Rao

Stocks markets record high, dips on housing data and social media stocks

Source: Bloomberg
Source: Bloomberg

The Dow Jones Industrial Average recorded another closing high; the Dow rose 7.77 points, or 0.05%, to close at 16,072.54. Earlier, the Dow hit yet another all-time intraday high at 16,109.63. The S&P 500 dipped 2.28 points, or 0.13%, to close at 1,802.48.The Nasdaq Composite Index touched an intraday high of4,007.09, but pulled back in late trading to close at 3,994.57, up by 0.07%.

The Nasdaq briefly topped 4,000 on Monday, 25 November, for the first time since September 2000, but failed to close above that key level. While the tech-heavy Nasdaq did cross a big milestone, it is still well below its peak of above 5,000, set in March 2000.

Markets opened higher on reaction to the landmark deal reached between Iran and the US, the UK, Russia, France, Germany, and China over the weekend, but ended on a mixed note on disappointing housing market reports.

Besides the Iran deal and pending home salesreports,it was business as usual at the stock markets. Trading volume is expected to remain low during this holiday-truncatedweek, ahead of Thanksgiving on Thursday.

The S&P Healthcare Sector Index rose 0.41%and the S&P Financial Sector Index added 0.10%,while the S&P Energy Index fell 0.83% following a deal to reduce sanctions for Iran.

Movers & Shakers

mm pic 2Social media stocks dropped duringthe day, a sign that this sector may be losing momentum.

Shares of Yelp (NYSE:YELP) tumbled 6.72% to $58.20;the stock price has morethan tripled this year.

Facebook (NASDAQ:FB) shares fell 3.05% to close at$44.82, breaking through the technical support level at $45.80.Facebook’s stocks have more than doubled so far this year.

Source: WSA
Source: WSA

Twitter (NYSE:TWTR), the newest entrant on the stock market, slid 4.7% to end at $39.06.

LinkedIn (NASDAQ:LNKD), Groupon (NASDAQ:GRPN) and Pandora (NYSE:P) also reported sharp dips.

Wal-Mart Stores Inc. (NYSE:WMT) shares reached an all-time intraday high of $80.57 after the announcement of its new chief executive.Shares of Wal-Mart closed at $80.43, up by 0.78%.

The Boeing Company (NYSE:BA) shares fell 2.18% to $133 after the company alertedairlines on Friday about the risk of engine icing problems on its new 747-8 and 787 Dreamliner planes. Shares of General Electric (NYSE:GE), which makes the engines, dropped 1.30% to $26.73.

Commodities

Gold for February delivery jumped $11.20 or 0.90%to close at 1,252.40.Silver for March delivery gained 32 cents, or 1.6%, to close at $20.25 a troy ounce.

The agreement between world powers and Iran to partially curb Iran’s nuclear program was seen to bolster thepositive sentiment, even though it may not increase Iran’s oil exports. US crude oil fell 75 cents, or about 0.69%, to settle at $94.19 a barrel.

Economic Front

The National Association of Realtors said thatits pending home sales index declined by a seasonally adjusted 0.6% in October, as compared to estimates of a 1.3% gain.

Estimates for pending home sales for September were revised to a 4.6% decline, from a previously reported dropof 5.6%.

Year-on-year, pending home sales fell at an annualized rate of 2.2% last month, compared to expectations ofa 1% decline, after rising 2% in September.

The downbeat data reduced expectations that the Federal Reserve will start tapering its bond-buying program as soon as December.

Top News

Testing time ahead for Google-backed genetic testing firm after FDA halts sales of its DNA testing kits

The US Food and Drug Administration (FDA) has ordered 23andMe, a Google-backed genetic testing firm, to halt sales of its home-testing kits as they donot have regulatory clearance.

Founded in 2006 by Anne Wojcicki, 23andMe sells a $99 DNA test that the company claims can detect a range of genetic variants and provide information about human health risks.

Google has invested millions of dollars in 23andMe, which is led by Google co-founder Sergey Brin’s estranged wife Wojcicki, over the years.

Succession at Wal-Mart puts company veteran at helm

A change of guard is in the offing in Wal-Mart. Come February 1, 2014; thecompany’s veteran Doug McMillon would be anointed its new President and Chief Executive. McMillon, who joined the company in 1990, currently serves as the chief of Wal-Mart’s international division.Prior to Wal-Mart, hehad served as CEO of Sam’s Club from 2006 to 2009, and before that, had focused on merchandising in the US.McMillon will replace Mike Duke, who has been CEO since 2009.

Carlyle Group raises $13 billion in private equity funds

The Carlyle Group (NASDAQ: CG) has secured $13 billion for its flagship North American investment vehicle. The fund, which primarily focuses on corporate leveraged buy-outs and strategic investment in the US, has exceeded its initialestimates for raising funds. Carlyle has joined a pool of companies like Silver Lake, CVC Capital Partners, Warburg Pincus, and Advent International, which have secured more than $10 billion in private equity funds. Private equity companies have so far raised $279 billion in 2013, beating the amount invested for the whole of 2012. Meanwhile, Carlyle Group LP’s stock rose 1.08% on the NASDAQ to close at $32.83 during Monday’s trading session.

Releases/Events – Today

Corporate Releases:

  • Tiffany’s (NYSE:TIF) and Barnes & Noble (NYSE:BKS) would be reporting their latest quarterly results on Tuesday, November 26, 2013.
  • Hewlett-Packard (NYSE:HPQ) will be in focus as investors look for an update on Meg Whitman’s turnaround plan for the PC and printer maker on its earnings release on Tuesday, November 26, 2013. Investors have been pleased with Whitman so far, and HP has been beating low expectations. Shares of HP are up almost 80% this year so far.

Economic Releases:

  • Tuesday, November 26, 2013
    • Housing Starts: The census will publish both September and October numbers due to government shutdown-related disruptions
    • S&P/Case-Shiller Home Price Index
    • Consumer Confidence
    • Richmond Fed Manufacturing Index

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