S&P 500 and Dow Witness a Downward Trend in the Market – Companies to Watch; KB Home, Wells & Fargo Co, JPMorgan Chase & Co, Applied Materials and Facebook Inc
S&P 500 (INDEXSP:.INX) and DOW Jones Average 2 Minute (INDEXJX:.DJI) both continue their losing streak into the fourth session. This is mainly due to the possible shutdown of the US government, which has the investors worried. Both S&P 500 and Dow Jones ended lower on Tuesday.
Another reason for this downward trend is the uncertain intentions of the Federal Reserve of scaling back the stimulus because of the last week’s decision made by the Central Bank to not change its current program. For S&P 500 these losses of yesterday are the longest downward losing streak since August.
For second day in a row, the biggest losers for S&P 500 on Tuesday were the banks. Shares of JPMorgan Chase & Co (NYSE:JPM) went down by 2.2% ($50.32) whereas Wells Fargo & Co (NYSE:WFC)’s shares also went down by 1.4% ($41.73). The downward trend in Wells Fargo’s shares was mainly due to rejection of the bank’s appeal by the Federal judge; the appeal was to relieve Wells & Fargo Co (NYSE:WFC) of a lawsuit filed by the US government, which accused Wells and Fargo to be the largest fraud in mortgage lenders in the US.
Dow Jones Industrial Average (^DJI) lost 66.79 points on Tuesday; it went down by 0.43% (15,334.59). Standard & Poor’s 500 Index also went down by 0.26% or 4.42 points at 1,697.42. The Nasdaq Composite Index saw an upward growth by 0.08% or 2.97 points at 3,768.25.
This upward trend in NASDAQ was mainly due to an increase in the shares of Facebook Inc (NASDAQ:FB) by 2.7% ($48.45). Chinese government put a ban on Facebook and other social media website due to security issues; however, it was announced in South China Morning Post that these websites will be accessible to users in Shanghai, which is a free-trade zone. A Citigroup (C) analyst upgraded shares of Facebook to a rating of “buy”.
Another concern that affected the day’s financial news was the upward trend in the prices of US homes; they went up by 0.6% in July and subjected to seasonal adjustment. According to another report this results in a dip in the confidence level of the consumers this month.
There was a positive change in homebuilders stocks; shares of US’s 3 highest ranked homebuilder, Lennar Corporation (NYSE:LEN) went up by 4.3% ($36.01) because of a quarterly profit report that exceeded expectations. Shares of KB Home (NYSE:KBH) also went up by 4.3% ($17.76) after its results. Shares of PHLX Housing Sector (INDEXNASDAQ:HGX) went up by 1.5%.
After the news of an all-stock merger between Applied Materials, Inc. and Tokyo Electronic Ltd was announced, share of Applied Materials, Inc. (NASDAQ:AMAT) went up by 9.1% ($17.45). This merger will create a company worth $29 billion.