Back to top

Market News

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Bellwether firm FedEx’s profit warnings denied most of the benchmarks a finish in the green on Wednesday. While the profit warning was an immediate headwind in the morning, markets swayed between gains and losses as investors remained edgy over the outcome of the ECB meeting on Thursday.  Investors’ reluctance to bet big was evident in the paltry movement of the benchmarks.

The Dow Jones Industrial Average (DJI) edged up 0.1% and closed at 13,047.48. The Standard & Poor 500 (S&P 500) slipped a mere 1.50 points or 0.1% to finish yesterday’s trading session at 1,403.44. The tech-laden Nasdaq Composite Index ended at 3,069.27, after dropping just 5.79 points or 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined by 1.3% to settle at 17.74. Consolidated volumes on the New York Stock Exchange, Nasdaq and the American Stock Exchange were roughly 5.49 billion shares, sharply lower than last year’s daily average of 7.84 billion. Declining stocks outnumbered the advancing ones on the NYSE; as for 50% stocks that dropped, 46% stocks closed higher.

Markets opened on a tense note as FedEx Corporation (NYSE:FDX), one of the world’s biggest package delivery firms, said it now expects lower profits for first quarter fiscal 2013 than previously forecasted. Earnings estimate for the quarter was slashed from $1.45 to $1.60 per diluted share to a range of $1.37 to $1.43 per share. The profit warning is a result of “weakness in the global economy”, and this statement from the company went on to unnerve investors.

Investors were thus reminded of the grim global economic situation. FedEx’s operations include shipments on a global scale. Therefore, its financial health can largely be tied to the health of companies around the world. A drop in profits for FedEx would suggest a lower amount of shipments globally or that companies are opting for lower budget package delivery services. In either case, global economic weakness was highlighted.

Shares of FedEx dropped 2.0% and that of its rival United Parcel Service, Inc. (NYSE:UPS) slumped 2.4%. Moreover, the disclosure not only affected FedEx’s or UPS’ shares, but the negative sentiment affected the broader markets also.

Among the sectors, the technology sector closed lower with Technology SPDR (XLK) dropping 0. 1%. As for the tech stocks, Intel Corporation (NASDAQ:INTC), Advanced Micro Devices, Inc. (NYSE:AMD), Broadcom Corporation (NASDAQ:BRCM), QLogic Corporation (NASDAQ:QLGC) and Western Digital Corp. (NASDAQ:WDC) plunged 0.1%, 3.6%, 1.2%, 1.2% and 1.1%, respectively.

Markets also expectantly awaited the outcome of the crucial European Central Bank meeting on Thursday. The European debt crisis is nothing new for investors. This has battered even the US markets for a prolonged period. Over the past month there have been both positive and negative developments across the Atlantic. Comments by ECB President Mario Draghi that the central bank will do “whatever it takes” to preserve the euro had sparked off significant cheer. Later, there were indications that the ECB will buy back Italian and Spanish bonds. Reports also suggested that the ECB is considering a ‘yield band target’ for the bond purchase plan. However, the plan hit some roadblocks with German central bank, Bundesbank, opposing the ECB’s idea to go ahead with bond purchases.

Thus, the meeting on Thursday will be of particular interest to investors who are hoping that the ECB will launch a new bond purchase plan. Italian and Spanish bonds are expected to be in the focus, as these nations are fighting incremental borrowing costs. Also, the central bank may reduce its short-term interest rate.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%