U.S. stocks fluctuated after a weekly decline, as small-cap shares resumed a selloff and investors awaited the start of corporate earnings season to assess the strength of the economy.
Micron Technology Inc. fell 4 percent after Samsung Electronics Co. said it will spend $15 billion building a chip plant in South Korea. GT Advanced Technologies Inc. sank 89 percent after the company filed for bankruptcy. Hewlett-Packard Co. jumped 5.7 percent after saying it will split into two companies. CareFusion Corp. surged 23 percent as Becton, Dickinson & Co. agreed to buy the company for $12.2 billion.
The S&P 500 (SPX) fell less than 0.1 percent to 1,967.26 at 2:59 p.m. in New York, erasing a 0.5 percent gain after failing to top its average price for the past 50 days. The Dow Jones Industrial Average retreated 3.40 points to 17,006.29. The Russell 2000 Index (RTY) of small companies dropped 0.4 percent after the gauge capped its fifth straight weekly decline. Trading in S&P 500 stocks was in line with the 30-day average at this time of day.
“We see stocks trading a little nervously today and this week before third-quarter earnings,” Jim Russell, a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said in a phone interview. “We’re anxious to see how company managements comment on the strong U.S. dollar and overseas revenue.”
The S&P 500 climbed 1.1 percent on Oct. 3, paring a weekly decline, after data showed the U.S. jobless rate declined to a six-year low and employers hired more workers than economists had estimated. The dollar strengthened last week to a four-year high before weakening today.
Small Caps
Stocks tumbled last week amid signs of economic weakness in Europe and geopolitical turmoil as the Federal Reserve is on course to end its bond-buying program this month. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.
The Federal Open Market Committee releases minutes from its Sept. 16-17 meeting on Oct. 8.
Selling last week was heaviest among small-cap stocks, with the Russell 2000 sliding 1.3 percent. The fifth weekly drop was its longest streak since 2008. The gauge closed Oct. 1 more than 10 percent below its record from March, meeting the common definition of a correction, before rallying in the final two days of the week.
Losses today came as GT Advanced Technologies plunged 91 percent $1.04. The maker of lab-grown sapphire used in mobile-device screens and parts supplier for Apple Inc. said it would continue operations during reorganization.
Frightened Bunnies
“That came as a big sucker punch out of the blue,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It underscores how fragile any rally in the small caps is at this juncture. The small caps are behaving like frightened bunnies.”
Alcoa Inc. unofficially starts the U.S. earnings season the same day as it reports third-quarter earnings. Eight other S&P 500 companies will post results this week. Profit at companies in the gauge rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.
The Chicago Board Options Exchange Volatility Index rose 3.9 percent to 15.11 today. The gauge known as the VIX slid 2 percent last week.
Five of the 10 main industries in the S&P 500 retreated today, with consumer-discretionary stocks sliding 0.4 percent for the biggest loss. Phone stocks jumped 0.6 percent to pace gains.
H&R Block Inc. fell 5.1 percent for the biggest decline in the S&P 500. The tax preparer said the sale of its banking unit to BofI Federal Bank is being slowed by a regulatory approval process. The firm had predicted the deal would close before tax season begins.
Semiconductor Makers
Micron Technology fell 4 percent and SanDisk Corp. dropped 3.1 percent after Samsung announced plans for the new chip factory.
Hewlett-Packard jumped 5.7 percent after announcing a split separating its corporate hardware and services operations, which will be led by current chief Meg Whitman, from the personal-computer and printer business. The latter will be led by Dion Weisler, currently vice president in charge of those operations.
CareFusion soared 23 percent. Becton, Dickinson agreed to pay $58 a share for the San Diego-based company that provides drug management and patient safety services to hospitals. That’s a 26 percent premium to its Oct. 3 closing price. Becton, Dickinson climbed 7.6 percent.
Durata Therapeutics Inc. rallied 74 percent as Actavis Plc announced a deal to acquire the maker of a skin-infection treatment.
source: Bloomberg
Micron Technology Inc. fell 4 percent after Samsung Electronics Co. said it will spend $15 billion building a chip plant in South Korea. GT Advanced Technologies Inc. sank 89 percent after the company filed for bankruptcy. Hewlett-Packard Co. jumped 5.7 percent after saying it will split into two companies. CareFusion Corp. surged 23 percent as Becton, Dickinson & Co. agreed to buy the company for $12.2 billion.
The S&P 500 (SPX) fell less than 0.1 percent to 1,967.26 at 2:59 p.m. in New York, erasing a 0.5 percent gain after failing to top its average price for the past 50 days. The Dow Jones Industrial Average retreated 3.40 points to 17,006.29. The Russell 2000 Index (RTY) of small companies dropped 0.4 percent after the gauge capped its fifth straight weekly decline. Trading in S&P 500 stocks was in line with the 30-day average at this time of day.
“We see stocks trading a little nervously today and this week before third-quarter earnings,” Jim Russell, a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said in a phone interview. “We’re anxious to see how company managements comment on the strong U.S. dollar and overseas revenue.”
The S&P 500 climbed 1.1 percent on Oct. 3, paring a weekly decline, after data showed the U.S. jobless rate declined to a six-year low and employers hired more workers than economists had estimated. The dollar strengthened last week to a four-year high before weakening today.
Small Caps
Stocks tumbled last week amid signs of economic weakness in Europe and geopolitical turmoil as the Federal Reserve is on course to end its bond-buying program this month. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.
The Federal Open Market Committee releases minutes from its Sept. 16-17 meeting on Oct. 8.
Selling last week was heaviest among small-cap stocks, with the Russell 2000 sliding 1.3 percent. The fifth weekly drop was its longest streak since 2008. The gauge closed Oct. 1 more than 10 percent below its record from March, meeting the common definition of a correction, before rallying in the final two days of the week.
Losses today came as GT Advanced Technologies plunged 91 percent $1.04. The maker of lab-grown sapphire used in mobile-device screens and parts supplier for Apple Inc. said it would continue operations during reorganization.
Frightened Bunnies
“That came as a big sucker punch out of the blue,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It underscores how fragile any rally in the small caps is at this juncture. The small caps are behaving like frightened bunnies.”
Alcoa Inc. unofficially starts the U.S. earnings season the same day as it reports third-quarter earnings. Eight other S&P 500 companies will post results this week. Profit at companies in the gauge rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.
The Chicago Board Options Exchange Volatility Index rose 3.9 percent to 15.11 today. The gauge known as the VIX slid 2 percent last week.
Five of the 10 main industries in the S&P 500 retreated today, with consumer-discretionary stocks sliding 0.4 percent for the biggest loss. Phone stocks jumped 0.6 percent to pace gains.
H&R Block Inc. fell 5.1 percent for the biggest decline in the S&P 500. The tax preparer said the sale of its banking unit to BofI Federal Bank is being slowed by a regulatory approval process. The firm had predicted the deal would close before tax season begins.
Semiconductor Makers
Micron Technology fell 4 percent and SanDisk Corp. dropped 3.1 percent after Samsung announced plans for the new chip factory.
Hewlett-Packard jumped 5.7 percent after announcing a split separating its corporate hardware and services operations, which will be led by current chief Meg Whitman, from the personal-computer and printer business. The latter will be led by Dion Weisler, currently vice president in charge of those operations.
CareFusion soared 23 percent. Becton, Dickinson agreed to pay $58 a share for the San Diego-based company that provides drug management and patient safety services to hospitals. That’s a 26 percent premium to its Oct. 3 closing price. Becton, Dickinson climbed 7.6 percent.
Durata Therapeutics Inc. rallied 74 percent as Actavis Plc announced a deal to acquire the maker of a skin-infection treatment.
source: Bloomberg