Stock Market Today: Russian Sanctions and Oil in Focus 8/12/14

Zacks Staff
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Big News of the Day:

Geopolitical news in Ukraine and Russia should be concerning to energy investors because of controversial sanctions going against Russia that could potentially impact the energy supply in the European Union. Investors should be careful about investing into oil and energy in the short run. However, some investors may look at this news as an opportunity, as energy stocks keep going down making more room for gains if bought at the right price.

  • Ukraine approved the first reading of sanctions against Russia including a controversial ban on Energy Transit hoping it will make Ukraine more independent from Russian gas.

  • Russia supplies about a third of European gas and the transit route for about half of the supply runs through Ukraine.

  • United States Oil Fund LP (USO): The most actively traded oil ETF opened today at $35.96/share falling about .71% from yesterday’s close of $36.22/share.

  • Energy Select Sector SPDR ETF (XLE): Opened at a loss of .14% at $96.47/share from yesterday’s close of $96.61/share.

Key Indexes/Asset Class Recap:

The market seems to be reacting in an adverse way today after a strong two day rally since Friday as energy leads the way for the market’s decline. While stocks are on the decline, gold is up, showing that investors are looking for a safe investment in this shaky market.

  • The S&P 500 is down .31% with the big winner in the benchmark so far being Newmont Mining Corporation (NEM) up 2.9% and the big loser so far being Salesforce.com (CRM).

  • The Dow Jones Industrial Average is down .29% along with the NASDAQ being down .43%.

  • Although the markets seem to be down so far, investors should not forget that the S&P 500 is above its 200 day moving average reassuring this 7-year bull market.

  • SPDR Gold Shares (GLD): is trading at 126.47, up .40%.

Economic Data Update:

As investors are getting ready to bid on the weekly Treasury Auctions, yields will be decreasing before the auctions making room for the excess supply:

  • The Treasury Department will sell $27 billion of 3-year notes on Tuesday, $24 billion of 10-year notes on Wednesday, and $16 billion of 30-year bonds on Thursday.

  • Since treasuries acting as a safe haven for investors, we will have to watch how the yields react to investor sentiment.

Important Economic data has been released today by the BLS, and record job openings have been surpassed in the past 13 years.

  • Employers posted 4.7 million job openings on the last business day of June which was little changed from May's 4.6 million job openings number.

  • Over the 12 months ending in June 2014, hires totaled 55.7 million.

  • Separations (also known as turnover) including quits, layoffs, and discharges totaled 53.3 million, yielding a net employment gain of 2.4 million.

Top Stocks on the Move

Biggest positive mover

  • Intercept Pharmaceuticals, Inc. (ICPT) is trading at $299.76/share up about 26.54% from yesterday’s close.

  • Intercept reported results from a mid-stage trial for a liver disease medication was indeed effective.

  • This is significant news, and investors will be on the lookout in the near future to see when this medication will have a positive ROI.

Biggest negative mover

  • Kate Spade & Company (KATE) is trading at $30.17/share down about 22.56% from yesterday’s close.

  • Kate Spade reported a near 50% surge in second quarter revenue Tuesday Morning nearly hitting a new 52-week high. Kate Spade reported $266 million in second quarter revenue, a clear hurdle over the $243 million analyst consensus.

  • Statements were made on a Conference Call where store expectations have been lowered to 100 from 134. The company experienced contraction in gross margin which came in at 58.6% for the quarter, down 3.1% to the same period last year.

Zacks #1 Ranked stock that is soaring

  • Inuvo Incorporated (INUV): is trading at $.99/ share and is up about 10.75%.

  • Inuvo recently reported a net income of $.02/ share for the second quarter indicating that Inuvo is properly managing investor money.

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