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Markets Recover From Yemen Turmoil, Biotech Pain


Today's financial recap and tomorrow's financial outlook.

Global markets were lower across the board early this morning as geopolitical tensions returned in force.

A Saudi Arabia-led coalition conducted air strikes against Shiite rebels in Yemen, sending crude oil prices up over 4%. News reports also indicated that Saudi Arabia and Egypt may send in ground troops.

Markets were already on edge following Wednesday's broad-based meltdown that saw the S&P 500 fall 1.5%, and the Middle East news was enough to force an ugly open for US equity markets.

The VIX rose 11% to 17.19 in early trading as tension hit the tape.

The widely-watched NASDAQ Biotechnology Index ETF (IBB), which dropped over 4% yesterday, fell initially but traders quickly started buying as the ETF neared its 50 day moving average.

That kicked off a modest rally, and the S&P made up some of its losses, finished down 0.2% at  2056.16.

Economic data was mixed again today.

Initial jobless claims for last week were 282,000, beating the Wall Street consensus by a small margin. The March Markit US Composite PMI was 58.5, representing an acceleration from last month's 57.2. The services component showed a similar improvement.

On the negative side, the Kansas City Fed Manufacturing Index was -4. Economists surveyed by Bloomberg were expecting a reading of 1. This was the first decline in over a year.

Flash memory maker Sandisk (SNDK) fell 18.5% to $66.20 after preannouncing weaker-than-expected first-quarter revenues. The company now expects sales of approximately $1.3 billion vs. a prior range of $1.40 to $1.45 billion. Two weeks ago, fellow semiconductor giant Intel (INTC) reduces its own guidance.

Consulting firm Accenture (ACN) beat analysts' earnings and revenue expectations, and shares rose 6.8% to $94.17.

The US dollar rose 0.9% against the euro today.

Gold extended its rally, rising up through $1,200 as the aforementioned Yemen events boosted global tensions.

However, traders took profits in gold stocks, with the Market Vectors Gold Miners ETF (GDX) declining 1.5%.

Tomorrow's Financial Outlook

At 8:30 a.m. ET, the second estimate of fourth-quarter GDP will be released. Economists expect a 2.4% increase. This report will be followed by the University of Michigan Sentiment report at 10:00 a.m.

Energy traders will be watching for the Baker Hughes Rig Count at 1:00 p.m., which could give insights into oil and gas production trends.

BlackBerry (BBRY) and Carnival (CCL) report earnings before the open.

In keeping with the recent action, the biotech sector will remain in sharp focus as it tends to lead the market, serving as a barometer for risk tolerance.

Twitter: @T3Live
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