US Stocks Fall in Overall Choppy Market
As reported recently in the Wall Street Journal the US stock market in July experienced a steeper decline than has taken place since last December. Leading the downward slope were biotechnical stocks with Biogen’s expected sales slide of particular note. Biotec’s leading product is a multiple-sclerosis drug (Tecfidera) has seen a drop in demand that that impacted the company’s earnings to the tune of a 22 percent drop in share value and a reduced earnings expectation. Markets reacted negatively overall with the Dow Jones Industrials falling .9 percent, S&P 500 dropping 1.1 percent, and the Nasdaq Composite similarly experiencing a fall of 1.1 percent. Overall Nasdaq Biotechnology index impact was a significant decline of 4 percent, although the index remains up 25 percent for the full year 2015.
Technology stocks in general likewise are experiencing a downturn in recent trading sessions including IBM, United Technologies and even those of Apple and Microsoft. These drops have resulted from disappointing earnings results. On the plus side those companies who are able to stand out by increases in revenue in these difficult sectors are finding rewards as a result of their successes. Companies such as Amazon, Google, and Netflix have seen stocks increase in value as revenues rise.
Reuters also presented news of choppy markets in the US precipitated in part by concerns over the Chinese currency losing more than 4 percent of its value. With China’s impact as the world’s second-largest economy, such fluctuations do not go unnoticed by investors or analysts. Japan’s economy has also experienced a level of contraction creating a reaction to the possible impact on energy stocks and oil prices.
Additional impacts of the overall decline were caused by dropping oil and metals prices and investor selloffs in the materials and energy sectors. Chinese economic slowdown reports have also created some anxiety among investors questioning whether a broader global downturn is taking place.
Is There Any Good News?
Reuters also reported that even with revenue drops of 3.5 percent according to reports in from most S&P 500 companies their analysts expect second-quarter earnings to rise by an estimated 1.2 percent. Choppy markets also have a history of reversing downward slides to upticks, sometimes in a short amount of time. This is part of the derivation of the term, reflective of a boat on choppy waters that result in the downward slide on a wave and a subsequent rise on the other side. Consult with your broker for sound investment advice before reacting in haste to what may be a short-term impact.
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