US Stocks Turn Mixed as Rally Flames Out
New York (Sept 21) Friday's profit-takers came back to the markets by midday Monday, pushing the Nasdaq lower and more than halving earlier gains on the S&P 500 and Dow Jones Industrial Average.
Stocks have been under pressure, falling more than 1% on Friday, as investors reacted to the uncertainty of when the Federal Reserve might hike rates after Fed officials opted last week to hold rates near zero.
The S&P 500 was up 0.3%, the Dow added 0.44%, and the Nasdaq fell 0.13% after rising earlier in the session.
Existing home sales dropped in August for the first time in four months, according to the National Association of Realtors.
San Francisco Fed President John Williams said on Sunday that the decision to hold interest rates near crises levels was a "close call." Williams told Fox Sunday Morning Futures that the decision was based upon recent concern over the global financial system.
Must Read: 10 Big-Name Stocks That Are Already in Correction Territory
Separately, St. Louis Fed President James Bullard told The Wall Street Journal he had argued for a rate hike given the economy's recovery.
Atlanta Fed President Dennis Lockhart will have the chance to discuss his views on the decision to keep rates steady in a speech at 1 p.m. EDT.
Stocks have been under pressure after the Fed made it clear last week that a rate hike this year was still likely. The Fed's dot plot forecast showed that Fed members expect interest rates to close out the year at 0.40%, meaning a hike in October or December is a possibility. A majority of Fed members expect to raise rates this year, Fed Chair Janet Yellen said in a press conference."
Former Greek Prime Minister Alexis Tsipras scored an unexpected second chance after securing a clear election victory over the weekend. Tsipras had stepped down over the summer after ditching his anti-austerity platform to seal a deal with eurozone creditors for more debt relief. The leftist Syriza party also secured enough votes to only need one ally, the Independent Greeks, rather than a number of different parties as it has over the past eight months. The Athens Stock Exchange fell 1%.
The major biotech stock indicesfell Monday minutes after Democratic presidential candidate Hillary Clinton tweeted that she'll release a plan to tackle escalating drug prices on Tuesday. The iShares Nasdaq Biotechnology Index (IBB) was down 3.7% while the SPDR S&P Biotech ETF (XBI) was off 4.2%.
Atmel (ATML - Get Report) shares surged nearly 14% after U.K. chipmaker Dialog Semiconductor agreed to buy Atmel in a deal worth $4.4 billion. Dialog had previously been in talks to buy another chipmaker, AMS, before talks broke down.
Apple (AAPL - Get Report) admitted to a rare security breach on Monday after removing a number of applications from its App Store that contained malicious software. The company said the breach was tied to a fake version of a software tool posted on Chinese Web sites.
Yahoo! (YHOO - Get Report) shares were 1% higher after a lockup on 63% of Alibaba (BABA) shares ended over the weekend. Yahoo!, one of Alibaba's biggest shareholders, now has the option to sell stock. Alibaba shares were up 1.4%.
Lennar (LEN) shares were on watch after a better-than-expected quarter. The homebuilder reported a 16% increase in deliveries over the quarter, while the average sale price of homes delivered jumped 5% to $350,000. New orders increased 10% to 6,495 homes.
Volkswagen (VLKAY) shares plummeted 18.2% after the company admitted to cheating on emissions tests which resulted in a halt in diesel car sales. A probe uncovered software that intentionally enacted pollution controls when being tested.
Starwood Waypoint Residential Trust (SWAY) jumped 10% after agreeing to merge with Colony American Homes. The all-stock deal will combine the two into a company with an asset value of $7.7 billion.
Pandora (P) shares spiked more than 5% and trading was halted for volatility twice Monday despite the absence of any news from the company. Rumors were that Pandora had been granted a favorable Copyright Royalty Board ruling that would positively impact its content acquisition costs.
GoPro (GPRO) slumped after Barron's compared the action camera maker to BlackBerry (BBRY) . Analysts said GoPro's line was a "one product wonder" and that competitors such as Xiaomi were encroaching on its market.
Source: FXstreet
