On Friday, The stock market finished the week on a broadly lower note with the NASDAQ and S&P 500 enduring their worst week since 2012. The NASDAQ fell 1.3%, ending the week with a loss of 3.1%. For its part, the S&P 500 settled lower by 1.0% to end the week down 2.7%. The Dow Jones Industrial Average dropped 143.47 points to close at 16,026.75; the NASDAQ dropped 54.37 points to close at 3,999.73. The S&P 500 fell 17.39 points to close at 1815.69.
Market indices faced selling activity at the open after the overnight session failed to deliver any noteworthy respite following yesterday's drubbing. The lack of a concerted rebound effort on Friday likely fed into concerns that the stock market is in the midst of a larger degree price correction than what participants have grown accustomed to seeing the past few years.
Despite starting on a low, the major averages spent the initial 90 minutes flat lining. The S&P 500 and NASDAQ were able to make a brief appearance on the up with help from biotechnology, while the Dow spent the entire day in the red.
Biotechnology notwithstanding, other momentum names that comprise a portion of the consumer discretionary sector (-1.4%) and a good part of the technology space (-1.2%) were weak once again. Amazon.com, Google and Netflix lost between 1.7% and 2.5%, to name a few.
Dow Jones Industrial Average (April 7th – 11th, 2014)
From an economic perspective, producer prices were announced, noting a jump of 0.5% in March, the largest monthly increase since June, after falling 0.1% in February. Market analysts expected the PPI to increase 0.1%. The consensus is having difficulty forecasting the PPI following a change in methodology. Under the previous PPI methodology, price growth for finished goods was down 0.1%. That was in line with expectations. The entire increase in producer prices was the result of a bounce in prices for final demand for services. After declining 0.3% in February, these prices increased 0.7%, which was the largest monthly gain since January 2010.
The University of Michigan Consumer Sentiment Index increased to 82.6 in the preliminary reading for April from 80.0 in March. That was the strongest sentiment reading since July 2013. Market analysts expected the index to increase to 81.0. Consumer sentiment typically follows changes in the equity markets, unemployment, and gasoline prices. The surveys were filled out prior to the recent weakness in the stock market, so equity prices enhanced sentiment in the preliminary reading. If the market does not rebound, we would expect the final reading to be notably lower.
On Friday, American oil producer ExxonMobil defused green critics with releasing some of its risk-disclosure promises.
Shareholders of ExxonMobil will vote on just one environmental resolution on May 28th, according to a proxy filing today. That’s after Irving, Texas-based Exxon convinced activist traders to withdraw two proposals dealing with greenhouse gas restrictions and hydraulic fracturing.
Environmentalists and corporate-governance activists from groups including the Sisters of St. Dominic and Arjuna Capital have made Exxon’s annual meeting a focal point for objecting to everything from drilling shale to producing motor fuels linked to climate change.
This year, the company sought to head off criticism by striking deals with some of its opponents after months-long negotiations. On March 20th, Exxon agreed to provide details on oilfields and other assets whose value may be threatened by carbon limits; two weeks later, the producer promised to disclose risks associated with hydraulic fracturing, or fracking.
Also on Friday, it was announced that ExxonMobil’s CEO compensation would rise 3% $28.1 million. This would mainly be in the form of stock awards. The CEO of Exxon Mobil Corp. received compensation worth $28.1 million last year, a 3% increase over the previous year.
Most of Rex W. Tillerson's compensation was in the form of stock awards, which the largest U.S. oil company valued at $21.3 million when they were granted. His overall compensation for 2013 was up from $27.2 million in 2012, under The AP's calculation.
The AP analysis of Tillerson's compensation considered salary, bonus, perks and the estimated value of stock and option grants that the company reported Friday to the US Securities and Exchange Commission. The calculation excluded changes in the present value of Tillerson's pension benefits.
Tillerson, 62, received a salary of $2.7 million, a 6% increase from a year ago, plus a cash bonus of nearly $3.7 million, which was down 20 percent because Exxon's earnings fell compared with 2012, the company said.
ExxonMobil (April 7th – 11th, 2014)
The value of Tillerson's stock awards increased $1.6 million, or 8%, from 2012, because of a rise in the company's share price. He received other compensation valued at $496,704. The biggest items in that miscellaneous category were $190,190 in matching contributions to a retirement plan and $177,140 for personal security.
Exxon earned $32.6 billion last year, a decrease of 27% from 2012, which was the company's second-best year ever, helped by high and rising oil prices. Exxon Mobil shares, however, rose 17% in a strong stock market during 2013. Through Thursday's close, they were down 4% in 2014.
Exxon produces oil around the world and is also the biggest producer of natural gas in the United States since it bought XTO Energy in 2010, a deal that hasn't lived up to expectations because of low gas prices. Tillerson, who also serves as chairman, has led the Irving-based company since 2006.
Over the course of the trading week, ExxonMobil’s stock was quite volatile with it trading from a weekly high of $97.79 on Tuesday and weekly lows of $96.37 on Friday.
Equities/indices: the Dow Jones Industrial Average ended the week on a low but performed fairly well when you look at the week overall. Those that traded binary options based on the value of the Dow Jones first thing on Wednesday morning through a binary call option would have been “in the money” by late afternoon of the same trading day.
USD/JPY: the USD/JPY currency pair maintained low levels for most of the week except Monday. Those that traded binary options based on the value of this currency pair first thing on Tuesday morning through a binary put option would have experienced successful results by midday of the same trading day.
ExxonMobil: following its range of announcements, ExxonMobil experienced a fairly volatile week. Those that traded binary options based on the price of this stock first thing on Thursday morning through a binary call option would have been “in the money” by late morning of the same trading day.
A range of economic indicators will be announced next week including retail sales figures and housing starts. Retail sales figures will be announced on Monday April 14th and if they demonstrate that retail sales are rising, this will show that there is greater consumer confidence in the US. This will help boost the value of stocks in the retail sector as well as US market indices in particular. Housing starts will be discussed on April 16th and again will provide an indication of the strength of the US economy. If more houses are being built this gives us an idea that people are able to purchase homes and also that this will industries that service the construction and real estate industries. Additionally, 1st quarter earnings will continue to be announced next week so this will also have an influence on the value of stocks.
Even with all of the market activity going on at the moment, the markets still ended on a low. Hopefully this momentum will continue as this will help traders who are looking to trade on growth markets. Luckily with binary trading you can still earn profits as you trade even if the financial asset falls – simply by placing a put option on the value of the asset.
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