Stocks Extend Losses
U.S. stocks traded sharply lower, across-the-board by mid-day trade on Thursday, tracking rout in global equity, commodity and bullion markets as market participants are edgy after the Fed indicated at possible pullback of the bond purchase program by the year-end, raising concerns that it could decelerate the momentum of the U.S. economy.
At last check, the DJIA plunged 1.50%; the NASDAQ Composite Index tumbled 1.59% while the S&P 500 Index slumped 1.67%.
On the U.S. economic data front, existing home sales rose more-than-expected. A data provided by the National Association of Realtors showed that existing home sales climbed 4.2% in May to an annual rate of 5.18 million units. Economists expected existing home sales to rise at an annual rate of 5.00 million units. This was the highest level in preceding three and half years.
According to the Philadelphia Federal Reserve, factory activity in the mid-Atlantic region picked up in June as the index climbed to 12.5 from negative 5.2 in the previous month. Economists expected the reading at negative 2. A reading exceeding zero signifies expansion in manufacturing activities.
Weekly initial jobless claims rose 18,000 to a seasonally adjusted 354,000 for the last week, the U.S. Labor Department said. Economists expected weekly jobless claims climbing to 340,000.
Shares of Wright Medical Group Inc. (NASDAQ: WMGI) rallied on Thursday. Wright Medical announced on Wednesday that it has entered in a definitive agreement with MicroPort Medical B.V., under which MicroPort Scientific Corp, the latter’s subsidiary will acquire the former’s OrthoRecon business in deal estimated at $290 million. The deal is expected to close by the end of the third quarter or at the start of the fourth quarter of 2013, subject to regulatory and MicroPort’s shareholders’ approval.
Citi reaffirmed “buy” rating on ConAgra Foods Inc. (NYSE: CAG) and has a price target of $41. The firm also added the stock in its “Top Picks” List; shares however edged lower.