Stock market news today, August 13, 2014: U.S. stocks were in the red on Tuesday as concerns about the European markets affected investor sentiment. Geopolitical hot spots in Ukraine and in the Middle East have led to an increased emphasis on reducing exposure to risk.
In New York and London, oil prices slipped on supply and demand concerns. First, the International Energy Agency slashed its 2014 global oil demand forecast. Meanwhile, the U.S. Energy Information Administration announced that U.S. producers had struck a near 30-year production high in July.
In positive news for the U.S. government, the U.S. Department of the Treasury said that the nation's budget deficit is 24% narrower this year than it was a year ago as a stronger economy helps revenue advance almost seven times faster than spending. Despite the high-fives around Capitol Hill, the United States is still more than $17 trillion in debt.
Here's what you should know to make your Wednesday profitable:
- Insider Influence: The Wall Street Journal reports that U.S. banks are lobbying lawmakers and regulators to delay implementation of the Volcker Rule by up to as many as seven years. The Volcker Rule, which is a central provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, would force banks to ban proprietary trading and force institutions sell investments in hedge funds, private-equity firms, and venture-capital funds or any other asset that they do not manage. Prominent U.S. banks that would be positively impacted by the delay, such as JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC), and Morgan Stanley (NYSE: MS) saw their shares on the rise in early market hours.
- Tax Hikes Fail: In an unsurprising consequence of its recent sales tax hike, the Japanese economy saw its largest quarterly GDP contraction since the 2011 earthquake that paralyzed the island nation. In the three months through June, the economy shrank an annualized 6.8% thanks mainly to a crash in consumer spending in the wake of the nation's sales tax increase that accompanied rising inflation and spikes in the standard of living.
- Energy Dips: Energy companies will attempt to come back from a lackluster session on Tuesday. Several of the S&P 500 energy leaders saw tough days on news of reduced global demand and rising U.S. supplies. Shares of Forest Oil Corp. (NYSE: FST) slipped more than 8.5% while shares of Comstock Resources Inc. (NYSE: CRK) dipped 5% on the day. Dow components Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) also showed marginal losses on the day, but ticked back into the positive in post-market hours.
- Digital Dive: Shares of King Digital Entertainment Plc. (Nasdaq: KING) plunged more than 20% on news that the company's second-quarter adjusted earnings were weaker than expected. The company's quarterly revenues came in at roughly $594 million, short of Wall Street's expectation of $608 million. The company is now fighting a branding problem as its recent rollout of games in China and its much anticipated game "Bubble Witch" failed to quell investor concerns for the road ahead. Its Chief Executive Officer Riccardo Zacconi has now promised a $150 million dividend for existing shareholders, but it failed to stop yesterday's strong sell-off.
- IPO of the Year: With its much anticipated IPO on tap, Chinese e-commerce giant Alibaba (NYSE: BABA) has restructured its business relations with payments processor Alipay. The deal, which will provide Alibaba at least $9.4 billion will lessen the company's risk in global financial services, all while ensuring a strong return through transaction fees. Shares of Yahoo! Inc. (Nasdaq: YHOO), which owns a $26 billion stake in Alibaba, were down less than 1% in premarket trading.
- Earnings Reports: Stay tuned for earnings reports from Deere & Co. (NYSE: DE), Macy's Inc. (NYSE: M), Pinnacle Foods Inc. (NYSE: PF), InterOil Corp. (NYSE: IOC), SeaWorld Entertainment Inc. (NYSE: SEAS), Applied Industrial Technologies Inc. (NYSE: AIT), Canadian Solar Inc. (Nasdaq: CSIQ), Epizyme Inc. (Nasdaq: EPZM), Cisco Systems Inc. (Nasdaq: CSCO), YuMe Inc. (NYSE: YUME)
- Today's Economic Calendar: Today's schedule features speeches by two Federal Reserve Bank presidents, MBA Purchase Applications, the EIA Petroleum Status Report, and an update on Business Inventories.
Full U.S. Economic Calendar August 13, 2014
- MBA Purchase Applications at 7 a.m.
- Retail Sales at 8:30 a.m.
- New York Federal Reserve Bank President William Dudley speaks at 9:05 a.m.
- Boston Federal Reserve Bank President Eric Rosengren speaks at 9:20 a.m.
- Atlanta Fed Business Inflation Expectations at 10 a.m.
- Business Inventories at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 10-Yr Note Auction at 1 p.m.
We're in the midst of a generational bull market, but there will be setbacks along the way. Learn how to protect yourself from market declines, and make more money on the recovery...
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.