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. 127.92 0.05 0.04 13,107,437
C Citigroup Inc. 57.39 -0.99 -1.70 29,261,887
SODA SodaStream International Ltd. 41.45 0.13 0.31 136,609
GALE Galena Biopharma Inc. 1.79 -0.02 -1.11 394,988
DIS Walt Disney Company (The) 108.16 0.19 0.18 7,162,518
NKE Nike Inc. 53.27 -0.38 -0.71 6,732,662
BAC Bank of America Corporation 22.63 0.58 2.63 124,272,029
LULU lululemon athletica inc. 68.50 -0.28 -0.41 770,502
WFC Wells Fargo & Company 54.27 0.49 0.91 21,150,699
MRK Merck & Company Inc. (new) 61.17 -0.31 -0.50 8,122,835
ICPT Intercept Pharmaceuticals Inc. 115.80 2.17 1.91 372,244
MU Micron Technology Inc. 22.32 0.58 2.67 19,470,963
MSFT Microsoft Corporation 62.50 -0.03 -0.05 19,666,751
SCMP Sucampo Pharmaceuticals Inc. 11.78 -0.03 -0.21 754,612
CMPRF Gentera Sab De Cv Ord 1.45 0.00 0.00 0

Comments

Emerging Growth

Lomiko Metals Inc.

Lomiko Metals Inc is an exploration stage company. It is engaged in the acquisition, exploration and development of resource properties. Its projects include Vines Lake project and Quatre - Milles…

Private Markets

Santo Diablo Mezcal

Santo Diablo Mezcal has been created to capitalize on a boom sector of the beverage market currently full of many small unmemorable products by producing one sexy, household, easily recognizable…

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor II® controllers, Airbrush®…