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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 152.13 0.17 0.11 14,996,185 Trade
C Citigroup Inc. 62.07 0.12 0.19 10,850,319 Trade
SODA SodaStream International Ltd. 52.60 0.00 0.00 182,335 Trade
GALE Galena Biopharma Inc. 0.56 -0.02 -3.01 380,207 Trade
DIS Walt Disney Company (The) 108.41 1.14 1.06 6,236,779 Trade
NKE Nike Inc. 52.59 0.24 0.46 5,921,314 Trade
BAC Bank of America Corporation 23.24 -0.01 -0.04 50,399,458 Trade
LULU lululemon athletica inc. 48.23 -0.46 -0.94 3,020,873 Trade
WFC Wells Fargo & Company 52.41 -0.37 -0.70 14,247,740 Trade
MRK Merck & Company Inc. (new) 64.92 -0.12 -0.18 3,685,720 Trade
ICPT Intercept Pharmaceuticals Inc. 112.15 -3.11 -2.70 254,591 Trade
MU Micron Technology Inc. 29.76 0.33 1.12 17,784,830 Trade
MSFT Microsoft Corporation 69.96 0.34 0.49 19,827,923 Trade
SCMP Sucampo Pharmaceuticals Inc. 10.25 -0.25 -2.38 326,691 Trade
CMPRF Gentera Sab De Cv Ord 1.70 0.00 0.00 0

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