February 17, 2014 – February 21, 2014
Monday was a holiday with the markets closed, the remainder of the week went fairly well. On Tuesday, the Empire State manufacturing survey showed the New York region factory activity slowing sharply for February, coming in at 4.48, down from 12.5 in January, but the market didn’t do much as everyone was waiting for the Fed’s January minutes to be released Wednesday. Ultimately, the minutes showed a few members of the Fed anticipating the need to raise interest rates as soon as the middle of the year, along with a willingness to ignore recent poor payroll reports as a by-product of the bad weather.
They also discussed changing the way the Fed keeps everyone informed, also known as forward guidance, due to the fact that the current unemployment rate of 6.6% is close to the Fed target rate of 6.5%. Also Wednesday, January housing statistics were released, and they were much lower than expected at 880,000 units, once again, due to weather.
On Thursday, jobless claims ending February 15 fell 3,000 to 336,000, right at about expectations. And the Consumer Price Index for January increased .1% month to month, also at expectations. Also on Thursday, the Purchasing Manager’s Index Flash report for February came in at 56.7, showing strong growth over last month’s 53.7. Markets rallied enthusiastically on the news. Now let’s take a look at some stocks.
Google Inc. (NASDAQ: GOOG) announced Wednesday on a blog post the launch of Google Capital, an investment division that aims to provide equity to technology companies that are entering their growth stage. Google reported that they have already invested in several companies, including SurveyMonkey, Lending Club. and Renaissance Learning. Google shares Wednesday slipped on the news, opening at $1205.30 and closing
Wal-Mart (NYSE: WMT) shares slipped on Thursday after the retailer announced their Q4 financials before the bell. Wal-Mart offered a weak full-year forecast as the chain suffers from declining sales in the grocery division, which usually accounts for more than half the company’s sales. The company also stated that in order to rebound from the declining numbers, they will double the amount of smaller stores that they originally intended to open this year. This will allow Wal-Mart to reach new customers in urban areas.
Facebook (NASDAQ: FB) announced late Wednesday night that the company has entered into an agreement to acquire WhatsApp, a mobile messaging platform for $12 billion worth of Facebook shares plus $4 billion in cash. Facebook reported that the acquisition was in line with both company’s mission of providing more connectivity and utility to the world by providing necessary internet services at a reasonable rate. Facebook shares slipped at the open this morning when investors thought that the acquisition was not ideal for Facebook’s goals of gaining more users, and attracting more advertisers, but slowly rebounded as the day drew on.
Tesla Motors (NASDAQ: TSLA) released their fourth quarter earnings report on Wednesday after the bell and reported the company more than doubled their revenue to $615.2 million while earning $0.33 per share. Analysts only projected the company to earn $0.23 per share. Tesla shares gained over 9 points during Thursday’s trading, hitting another 52-week high of $215.12.