STJ ST. Jude Medical, Inc.

By Sue Chang and Ellie Ismailidou, MarketWatch

Dollar tumbles as yen soars; Facebook, DreamWorks surge

The Dow Jones Industrial Average had its worst day in over two months Thursday as Apple Inc. extended its losing streak while the broader market crumbled under the combined weight of disappointing data and weak corporate earnings.

The Dow lost 210.79 points, or 1.2%, to close at 17,830.76. Apple(AAPL), which had been battered by worse-than-expected quarterly earnings, extended its losing streak for a sixth day -- its longest such streak in three years -- after billionaire Carl Icahn said he sold his entire stake in the company (http://www.marketwatch.com/), citing its inability to grow sales.

The S&P 500 slipped 19.34 points, or 0.9%, to close at 2,075.81 while the tech-heavy Nasdaq Composite dropped 57.85 points, or 1.2%, to close at 4,805.29.

The market had started off on a sour note after the Bank of Japan decided to keep its interest rates unchanged (http://www.marketwatch.com/story/no-additional-stimulus-from-bank-of-japan-negative-rate-holds-2016-04-27) and offer no additional stimulus. Sentiment further weakened on news that U.S. gross domestic product (http://www.marketwatch.com/story/gdp-slows-to-05-in-first-quarter-2016-04-28) grew only 0.5% in the first quarter, its slowest pace in two years. Economists had projected 0.7% expansion.

"People were kind of whistling past the graveyard and it took a while for all the negative news to seep in," said Karyn Cavanaugh, senior market strategist at Voya Financial.

The tepid GDP data also prompted investors to reassess whether the market's current valuation is warranted given muted earnings and slower growth, said Bruce McCain, chief investment strategist at Key Private Bank.

"The retreat reflects uncertainties among investors on whether the fundamentals support what they are paying for stocks," he said.

Stellar earnings from Facebook Inc. failed to mask the generally downbeat earnings season, particularly in the energy sector.

"Earnings are not a trainwreck, but they don't look good. There's nothing to give the market any mojo," said Cavanaugh.

Volatility is expected to pick up as downward pressure mounts going forward, according to Kristina Hooper, U.S. investment strategist for Allianz Global Investors.

"There are no catalysts in the stock market currently that will drive prices higher [and] we are in a relatively disappointing earnings season overall," she said.

Economy and the Fed: The BOJ decision came a day after the U.S. Federal Reserve opted to leave interest rates unchanged (http://www.marketwatch.com/story/fed-stands-pat-and-is-silent-about-future-of-interest-rates-2016-04-27), but kept its options open for a possible move in June.

Inflation as measured by the Federal Reserve's preferred PCE index rose at a scant 0.3% annual rate in the first quarter. But the core inflation rate that excludes food and energy climbed at a 2.1% pace, up from 1.3% in the prior quarter -- an increase that could potentially move the Fed closer to its next interest-rate hike later in the year.

On a more positive note, the number of Americans who applied for unemployment benefits (http://www.marketwatch.com/story/us-jobless-claims-climb-9000-to-25700-2016-04-28) remained near a four-decade low, reflecting continuing strength in the labor market.

Stocks to watch:Facebook Inc.(FB) soared over 7%, touching a record high of $120.79 earlier after it posted a 52% surge in revenue late Wednesday.

DreamWorks Animation Inc.(DWA) surged 24% on an agreement to be acquired by NBCUniversal (http://www.marketwatch.com/story/comcast-agrees-to-buy-dreamworks-animation-in-deal-valued-at-38-billion-2016-04-28), a division of Comcast Corp.(CMCSA)

St. Jude Medical Inc.(STJ) rallied 26% after Abbott Laboratories(ABT) said it would buy the medical-device maker in a deal valued at $25 billion (http://www.marketwatch.com/story/abbott-labs-agrees-to-buy-st-jude-medical-in-deal-valued-at-25-billion-2016-04-28). Abbot Labs dropped 7.8%.

First Solar Inc.(FSLR) shares fell 8.2% after the solar-panel maker's profit fell short of expectations (http://www.marketwatch.com/story/first-solar-names-ceo-revenue-nearly-doubles-2016-04-27). The company also announced a new chief executive officer.

SanDisk Corp.(SNDK) climbed 0.8% as its first-quarter earnings nearly doubled (http://www.marketwatch.com/story/sandisk-shares-rise-as-earnings-beat-wall-streets-expectations-2016-04-27) from a year earlier.

Ford Motor Co.(F) shares rose 3.2% after quarterly results, while Bristol-Myers Squibb Co. (BMY) also rallied on earnings. ConocoPhillips (COP) slid 0.9% after posting a loss that was smaller than expected. Colgate-Palmolive Co (http://www.marketwatch.com/story/colgate-palmolive-tops-sales-expectations-matches-on-profit-2016-04-28).(CL) rose 2.7% after topping sales expectations and matching on profit.

United Parcel Service Inc. (UPS) dropped 1.5% despite reporting better-than-expected earnings (http://www.marketwatch.com/story/ups-profit-beats-as-deliveries-increase-2016-04-28) as growth in domestic and international package delivery drove profit.

Valeant Pharmaceuticals Inc.(VRX.T) was up 1%. The company is expected to announce sweeping changes to its board of directors as early as Friday, The Wall Street Journal reported (http://www.marketwatch.com/story/valeant-to-replace-5-longtime-board-members-2016-04-27).

Read:Valeant CEO tells Senate committee drug price increases were too aggressive (http://www.marketwatch.com/story/valeant-ceo-to-tell-senate-committee-drug-price-increases-were-too-aggressive-2016-04-27)

Other markets: The BOJ's decision to stand pat on interest rates led the Nikkei 225 index to close down 3.6%, (http://www.marketwatch.com/story/asian-markets-mostly-up-ahead-of-bank-of-japan-meeting-2016-04-27) its biggest daily percentage loss since early February, while the yen saw a sharp rally (http://www.marketwatch.com/story/yen-rips-higher-against-dollar-after-boj-shocks-market-with-no-action-2016-04-28)

European stocks tracked global losses, stumbling 1.2%. Oil prices (http://www.marketwatch.com/story/crude-prices-pare-gains-after-us-data-shows-rising-supplies-2016-04-28) remained firm, ignoring a report of bigger-than-expected growth in U.S. crude inventories spurred some investors to unload the commodity.

Gold prices advanced 3%, to $1,266.40 an ounce.

--Barbara Kollmeyer contributed to this report.

(END) Dow Jones Newswires

April 28, 2016 16:41 ET (20:41 GMT)

SJM (NYSE:STJ)
Historical Stock Chart
From Mar 2024 to Apr 2024

SJM (NYSE:STJ)
Historical Stock Chart
From Apr 2023 to Apr 2024