Stocks Mixed as Yahoo!, Groupon Tumble
NEW YORK (TheStreet) -- Major U.S. stock indices closed mixed Wednesday as tech stocks fell amid a selloff in Yahoo! (YHOO) and Groupon (GRPN) shares and investors digested remarks from Federal Reserve Chair Janet Yellen. Indices were gaining from earlier in the session.
Productivity in the U.S. fell more than expected during the first quarter while labor costs rose.
- The Dow Jones Industrial Average was up 0.72% to 16,518.54 while the S&P 500 was 0.56% higher at 1,878.21. The Nasdaq was sinking 0.32% to 4,067.67.
- Russian President Vladimir Putin said troops were pulled back from the Ukrainian border, with his seemingly moderated stance causing Russian shares to rally.
- Yahoo! was 6.63% lower after Chinese Internet group Alibaba filed plans for its IPO on Tuesday. Yahoo! has a 24% stake in Alibaba.
- Groupon shed just over 20% after reporting that its first-quarter loss widened to 6 cents a share from a year earlier.
- First Solar (FSLR) shares gave up 5.75% as investors weighed second-quarter concerns against a near doubling of first-quarter earnings.
- Yellen's testimony before the Joint Economic Committee in Washington Wednesday morning had a slight dovish tilt, with new mentions of downside risks to the growth outlook, noted BNP Paribas economist Laura Rosner. "Yellen's view is still that "a substantial amount of slack remains in the labor market" means the Fed has ample room to take a patient approach to normalizing rates."
- Productivity fell 1.7% in the U.S. nonfarm business sector in the first quarter while unit labor costs rose by 4.2%. Expectations were for a 1.2% fall in nonfarm productivity and a 2.8% rise in labor costs.
- Chesapeake Energy (CHK) gained 4.44% after saying first-quarter profit jumped as it reported a 47% rise in revenue and higher production. The company raised its production growth outlook for 2014 to 9% to 12%.
- Tesla Motors (TSLA) is expected to post first-quarter earnings of 8 cents a share after the markets close on Wednesday. Other companies due to report include Prudential Financial (PRU), while Walt Disney (DIS) posted second-quarter profit of $1.08 a share against 83 cents a share a year earlier.
- In international markets, Germany's DAX closed 0.57% higher while the FTSE was 0.03% lower. The Hang Seng closed 1.05% lower while the Nikkei shed 2.93%. Prime Minister Yingluck Shinawatra has been ordered to resign by a Thai court, which found she had abused her power.
- Markets closed lower Tuesday after the OECD cut its global growth forecast and financial shares fell following a poor results from American International Group (AIG).
-- By Andrea Tse and Jane Searle in New York
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