Lowered Earnings Expectations send DJIA, S&P 500, and NASDAQ Into the Tank

Michael Teague |

The shockingly dismal jobs report issued by the Department of Labor last week carried over into Monday’s trading session, exacerbating widespread expectations that the first earnings season of 2014 will a disappointing one, and sending stocks plummeting by the closing bell.

The Standard & Poor’s 500 index was off by 1.26 percent to 1,819.20, while the Dow Jones Industrial Average was off by 1.09 percent for a finish at 16,257.94. The NASDAQ took the hardest hit, tumbling 1.47 percent by the end of trading to 4,113.30.

On the S&P 500, big techs provided a significant amount of downward pressure, with Facebook (FB) , Microsoft (MSFT) , and Micron Technology (MU) all heading lower on the day’s heaviest trading. Big banks were also a drag on the benchmark index, however, as Bank of America (BAC) , Citigroup (C) , and Wells Fargo (WFC) off by a percent or more each.

On the upside, support came from Beam Inc. (BEAM) , as the iconic whiskey producer watched shares jump by 25 percent subsequent to the announcement of its acquisition by the popular Japanese distiller Suntory, a deal carrying a price tag of $16 billion including debt.

All of the Dow’s components were caught in the sell-off, with particularly heavy losses for Walt Disney Co. (DIS) and Nike Inc. (NKE) , with the lone exception being major drug manufacturer Merck & Co. Inc.’s (MRK) 6.50 percent gain after the FDA showed renewed interest in the company’s Vorapaxar cardiovascular treatment that had previously been all but written off as a failure.

On the NASDAQ, uber-trendy yoga apparel-maker Lululemon Athletica (LULU) was off by over 16 percent after the company slashed guidance ahead of the release of its balance sheet for the recently-ended quarter. Israeli kitchen gadget-maker SodaStream International (SODA) saw shares lower by 25 percent for the same reason.

Intercept Pharmaceuticals (ICPT) , meanwhile, pared back ever so slightly on the previous week’s heliotropic 560 percent leap, with the stock unloading a relatively insignificant 18 percent by the closing bell. Overall, healthcare stocks performed incredibly well despite the day’s frantic sell-off, with double-digit gains for Alnylam Pharmaceuticals (ALNY) , Galena Biopharma (GALE) , Cadence Pharmaceuticals (CADX) , and Sucampo Pharmaceuticals (SCMP) .

Natural gas futures slated for Feb. 14 delivery were rose over 6 percent to $4.30 on the day on expectations that the polar vortex will continue to engulf huge swathes of the US mainland in unusually cold temperatures over the coming weeks.

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Symbol Name Price Change % Volume
BAC Bank of America Corporation 14.49 -0.19 -1.29 63,276,523
C Citigroup Inc. 43.81 -0.27 -0.61 13,773,743
CMPRF Gentera Sab De Cv Ord 1.77 0.00 0.00 0
DIS Walt Disney Company (The) 95.95 0.04 0.04 8,263,966
FB Facebook Inc. 123.94 -1.06 -0.85 35,058,803
GALE Galena Biopharma Inc. 0.44 -0.03 -5.40 5,000,110
ICPT Intercept Pharmaceuticals Inc. 173.03 6.13 3.67 334,204
LULU lululemon athletica inc. 77.65 0.27 0.35 717,008
MRK Merck & Company Inc. (new) 58.66 0.23 0.39 8,491,237
MSFT Microsoft Corporation 56.68 0.47 0.84 30,558,718
MU Micron Technology Inc. 13.74 -0.07 -0.51 21,792,899
NKE Nike Inc. 55.50 0.05 0.09 6,353,444
SCMP Sucampo Pharmaceuticals Inc. 11.75 0.07 0.60 332,876
SODA SodaStream International Ltd. 24.05 0.22 0.92 267,881
WFC Wells Fargo & Company 47.97 -0.16 -0.33 13,111,673


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