Indexes opened up to start Tuesday but sold off modestly as the day progressed as someone somewhere tried to find something negative in the Yellen comments to Congress. So they found a blurb where she called valuations stretched for smaller social media and biotechnology stocks and those areas sold off. Something like this is usually forgotten about in 24 hours. For the day the S&P 500 fell 0.19% and the NASDAQ 0.54%.
In semi-annual testimony before the Senate Banking Committee, Fed chair Janet Yellen said the central bank’s monetary stimulus was still necessary, given “significant slack” in the labor market and that inflation remained under the Fed’s target.
There was a solid piece of economic news as the economy continues to bounce back from a dreadful first quarter:
Consumer spending rose in June, with core sales – which exclude cars, energy and food costs — up 0.6 percent after an upwardly revised 0.2 percent in May.
Indexes continue to be fine and meander along.
The NYSE McClellan Oscillator actually is nearing oversold levels even though there has been nothing too drastic in the market of late – kind of interesting to see that.
There was some interesting news after hours as IBM will partner exclusively with Apple Inc to sell iPhones and iPads loaded with applications intended to serve corporate clients. This is not so much interesting for those 2 companies but another hit to Blackberry (BBRY) which has been a darling of late. It was down 4% in after hours after a huge run.
Yahoo (YHOO) fell ~2% in after hours after the company reported a decline in second-quarter net revenue. Not much great happening here in the chart and the much loved CEO Marissa Meyer will probably soon face pressure in her turnaround efforts. Right now people are more excited about Yahoo’s stake in Alibaba than anything Yahoo specific.
Yahoo Inc. said Tuesday that its second-quarter earnings and revenue declined, as the company struggled again with display advertising sales. Both fell short of Wall Street’s expectations, as did revenue forecast for the current quarter, causing the limping Internet icon’s stock to fall in extended trading.
Before the forecast was revealed during a conference call with analysts, Yahoo’s stock rose as the company announced that Alibaba Group agreed to reduce the number of shares Yahoo is required to sell in the Chinese e-commerce company in an initial public offering of stock this year. Yahoo, which holds a 23 percent stake in Alibaba, now has to sell only 140 million shares in the IPO, down from 208 million earlier.
Although the reduction means that Yahoo’s immediate windfall from the Alibaba IPO will be smaller, it’s also a long-term bet on Alibaba’s success. Analysts say Alibaba’s IPO could be bigger than Facebook’s $16 billion stock debut two years ago, which would make Alibaba the biggest tech IPO ever.
Earlier in the day Goldman Sachs (GS) and JPMorgan (JPM) both did enough to please investors.
JPMorgan, the biggest U.S. bank, when ranked by assets, reported a drop in second-quarter profit, although the profit exceeded the average analysts’ estimate. The bank also reported a decline in revenue, but the drop was not as steep as JPMorgan had forecast in May. Shares of Goldman Sachs Group gained after the company reported a 5 percent increase in second-quarter profit. Higher revenue from stock underwriting helped Goldman’s bottom line.