Stocks Plunge Amid Renewed Concerns Over Crude Prices and Global Demand

Strategic Insights -

Stocks across the US and European markets declined on Wednesday, wiping out a rally that pushed benchmark indexes more than 1% higher the day before. The selloff was triggered by a decline in crude oil prices, which fell amid renewed concerns over a slowdown in global demand. The S&P 500, Dow Jones Industrial Average, and Nasdaq all declined, with the Nasdaq falling the most, dropping 0.45%.

Key Takeaways:

  • The S&P 500 declined 0.34%, the Dow Jones Industrial Average dropped 0.34%, and the Nasdaq fell 0.45% on Wednesday.
  • Crude oil prices fell 3.2% to $51.33 a barrel, following a four-day rally since January 2009.
  • The Energy Information Administration will release data on Wednesday on whether U.S. crude inventories have increased or decreased over the week.
  • The ADP National Employment Report showed 213,000 jobs had been added to private payrolls in January, below expectations for an increase of 220,000.
  • Official U.S. nonfarm payrolls data to be released Friday is expected to show an increase of 230,000 jobs, while the unemployment rate is forecast to remain unchanged at 5.6%.
  • European shares were modestly lower, with Germany's DAX falling 0.36%, France's CAC 40 down 0.15%, and London's FTSE 100 tumbling 0.72%.
  • Greece has started negotiations with the International Monetary Fund to restructure a bailout package it received in 2010, allaying fears the country might default on its debt.
  • Staples will buy Office Depot for $6.3 billion in a cash-and-stock deal.
  • Disney reported first-quarter profits of $1.27 a share, ahead of expectations, driven by the success of its Frozen franchise.
  • Chipotle guided for low- to mid-single-digit comparable restaurant sales over 2015, causing shares to fall 6.6%.
  • Gilead Sciences guided for 2015 sales as high as $27 billion, below forecasts of $28.7 billion, causing shares to fall over 5%.

Statistics:

  • S&P 500 declined 0.34%
  • Dow Jones Industrial Average dropped 0.34%
  • Nasdaq fell 0.45%
  • West Texas Intermediate fell 3.2% to $51.33 a barrel
  • 213,000 jobs added to private payrolls in January (ADP National Employment Report)
  • 230,000 jobs expected to be added to U.S. nonfarm payrolls (official data to be released Friday)
  • 5.6% forecasted unemployment rate (official data to be released Friday)
  • 6.3 billion cash-and-stock deal for Staples to buy Office Depot
  • $1.27 reported first-quarter profits per share for Disney
  • 16.1% comparable restaurant sales growth for Chipotle in its fourth quarter
  • $27 billion maximum 2015 sales forecast for Gilead Sciences

Sources:

  • TheStreet (http://www.thestreet.com)
  • HSBC services PMI
  • Moody's Analytics
  • Energy Information Administration
  • ADP National Employment Report
  • International Monetary Fund (IMF)
  • Bloomberg
  • The Wall Street Journal