U.S. stocks lowered this Monday as investors began another long week of company earnings and also looked forward to a Federal Reserve's policy meeting. Kristina Hooper, investment strategist at Allianz Global investors said that companies like Xerox Corp (NYSE:XRX) and Apple Inc. (NASDAQ:AAPL) will be reporting this week. She said that even though one third of the quarterly earnings season has passed, the results has nowhere been close to 'spectacular' till now.
Hooper said that more and more companies are failing to meet the analyst's revenue forecast and this is troubling her even more than the mediocre income reports. She said that what we should be focusing on is the 'big revenue picture', which actually is more negative.
The Federal Reserve's meeting is supposed to happen on Tuesday and Wednesday, and while the central bank has come clear on its intentions to hike the interest rates soon, few investors believe that it is actually going to happen this year considering the current weak global economy. Moreover, the Federal government did not hike the interest rates in September which eventually helped set off a rally that was able to pull stocks out of the danger for this year last week.
A week of middling income reports
The S&P (Standard & Poor) 500 index dropped 0.2 per cent to 2, 071.18 and remains positive for 2015. The NASDAQ composite saw a hike of less than 0.1 per cent and reached 5,034.70. The Dow Jones industrial average dropped down by 0.1 per cent and still remains negative for the year at 17,623.70. Xerox, the business services and copier company, reported a disappointing revenue after dropping 3 percent. But not all the earnings reports sounded bad. Lendingtree Inc (NASDAQ:TREE), the online mortgage broker reported a better than expected result with a gain of 23.5 per cent. This in turn, has lent optimism to LendingTree which has raised its revenue estimate for the next year. Laboratory Corporation of America also rose 5.2 percent and achieved more than its third quarter estimates.
Companies that merged
Meanwhile, companies continued to merge too. The owner of the New York Stock Exchange and other stock markets, Intercontinental Exchange said that it will buy Interactive Data, a privately held market data company for $5.2 billion. The biggest electric company in U.S, Duke Energy Corp (NYSE:DUK) also said that it will buy Piedmont Natural Gas Company, Inc.(NYSE:PNY) for about $5 million. It might be interesting to see how this goes for the company after Piedmont rose 37 percent to $57.82.