This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Slip on Concerns Markets Overpriced

NEW YORK ( TheStreet) -- Major U.S. stock markets closed lower Monday as the excitement of corporate dealmaking led by Yahoo! (YHOO) was offset by investor concern that the Federal Reserve may curb its bond-buying economic stimulus program.

The S&P 500 closed off 0.07% to 1,666.29 while the Dow Jones Industrial Average lost 0.12% to 15,335.51. The Nasdaq slid 0.07% to 3,496.43.

The Fed's Open Market Committee is expected to publish its minutes on Wednesday offering investors clues about whether the central bank plans to continue buying roughly $85 billion in assets each month to stimulate the U.S. economy. Conservatives among the bank's presidents have dominated the conversation in recent weeks, warning that the program is adding to inflation while holding back economic growth.

The day's trading session was otherwise dominated by the announcement that Yahoo! plans to acquire the privately-held blog network Tumblr in a deal valued at $1.1 billion, while drugmaker Actavis (ACT) said it plans to acquire specialty pharmaceuticals firm Warner Chilcott (WCRX) for $8.5 billion in stock and assumed debt.

Also see: Yahoo! 'Tumbling' Down the Right but Expensive Path

Yahoo! added 0.2% to $26.58 as Warner Chilcott (WCRX) rose 2% to $19.60 and Actavis (ACT) gained 1.3% to $127.15.

Chicago Federal Reserve president Charles Evans, a FOMC voting member, spoke on Monday at the CFA Society Chicago Distinguished Speakers Series and said that the Fed has acted appropriately in guiding the economy. New York Fed President Bill Dudley is expected to speak on Tuesday. On Wednesday, Federal Reserve Chairman Ben Bernanke will testify on the outlook for the U.S. economy before the Joint Economic Committee of Congress. Later that day, the FOMC will release minutes from its April 30 to May 1 meeting.

Thomson Reuters reported that there have been 74 negative EPS preannouncements issued by S&P 500 corporations for the second quarter 2013, compared to 12 positive EPS preannouncements, resulting in a negative to positive ratio of 6.2 for the S&P 500 Index; if this persists, it would be the most negative of this ratio since the first quarter of 2001, according to Thomson Reuters.

The report also said that 67% of the 463 companies in the S&P 500 have reported first-quarter earnings above analysts' expectations, which is higher than the long-term average of 63% and matches the average over the past four quarters of 67% as companies manage to squeeze out better-than-expected earnings through measures including cost-cutting, hurting the outlook on hiring and possibly the economy in future quarters.

Only 47% of companies that released results reported first quarter revenue above analyst expectations, which is lower than the long-term average of 62% and lower than the average over the past four quarters of 52%, the report noted.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
WCRX $0.00 0.00%
WBSN $24.72 0.04%
ACT $307.51 0.20%
PCLN $1,143.07 0.00%
AAPL $126.44 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs