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Stock market hammered despite upbeat data

Posted by: Admin | Posted on: May 1st, 2015 | 0 Comments


(Reuters) – U.S. stocks, led by the Nasdaq, sold off on Thursday as Apple shares declined, and tech and biotech quarterly results disappointed.

Upbeat economic reports added to uncertainty about the outlook for interest rates, a day after data showed the U.S. economy had slowed to a crawl in the first quarter and the Federal Reserve pointed to weakness in the labor market and other areas of the U.S. economy.

Despite the day’s decline, all three major indexes posted slight gains for April.

The Nasdaq biotech index .NBI dropped 3.1 percent on Thursday, led by a 4.5 percent fall in Celgene (CELG.O), which reported lower-than-expected quarterly revenue.

The decline marked a fifth day of losses for the biotech index, which was down 8.1 percent for the week so far.

The Nasdaq fell for a fourth straight day, and was off 3 percent from Friday’s record closing high. The SP tech index .SPLRCT slid 1.6 percent, the day’s worst-performing sector, while small-cap stocks also underperformed. The Russell 2000 small-cap index .RUT was down 2.2 percent.

Apple (AAPL.O), down 2.7 percent at $125.15, was the biggest drag on the three major indexes. The company limited the availability of the Apple Watch after a key component was found to be defective, according to the Wall Street Journal.

“Biotechs and tech were leaders and now they’ve reversed,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

“Earnings don’t really support the valuations at this time, and I think the market needs to correct a bit. As we go into May I would say the best prescription would be to sell in May and go away.”

The Dow Jones industrial average .DJI fell 195.01 points, or 1.08 percent, to 17,840.52, the SP 500 .SPX lost 21.34 points, or 1.01 percent, to 2,085.51 and the Nasdaq Composite .IXIC dropped 82.22 points, or 1.64 percent, to 4,941.42.

For the month, the Dow was up 0.4 percent, the SP 500 gained 0.9 percent and the Nasdaq rose 0.8 percent.

The day’s data included a report showing the number of Americans filing new claims for unemployment benefits tumbled to a 15-year low last week.

After the bell, LinkedIn (LNKD.N) shares fell 24 percent to $191.70 and Gilead (GILD.O) shares gained 3.2 percent to $103.69 following the release of results. First Solar (FSLR.O) and SunPower (SPWR.O) both declined after hours following results.

During the regular session, Baidu (BIDU.O) declined 8.5 percent to $200.28 after China’s dominant Internet search engine provider reported its slowest quarterly revenue growth rate in almost seven years.

SP 500 earnings for the first quarter now are expected to have risen 1.1 percent, Thomson Reuters data showed, while revenue was expected to be down 3.2 percent.

Declining issues outnumbered advancing ones on the NYSE by 2,355 to 693; on the Nasdaq, 2,131 issues fell and 647 advanced. About 8.5 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion daily average for the month to date, according to BATS Global Markets.

(Editing by Savio D’Souza, Meredith Mazzilli and Steve Orlofsky)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Ygo48PGWNV8/story01.htm

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