The US stocks denied the fact, most humbly on Wednesday on the withdrawal of the equities from the latest high revenues or rather profits and the technology shares dropped on Wednesday and had given rise to questions and forced to doubt the fact that this would affect the whole economy as it compelled Nasdaq down to not less, but more than at least 1%.
According to the report of the Oracle Corporation, known to be one of the biggest company of Nashdaq, the sales revenue as well as the earning profits missed its goal and such an incident occurred for the first time in this decade. Oracle Coporation is now being considered in a similar podium with other companies, whose earnings have raised doubt about their long-term existence, for the prime reason that Oracle, had to bear a loss of 11.8 %.
Charles Schwab, the Director of Market and Sector Analysis stated that, “Oracle is a tech story, but there’s concern it could be a broader economic story,”. He also said that “We’re not ready to go that far yet, but it does show that businesses are unsure about the economic situation, especially with all the uncertainty about Europe.”
There was a strong thrust in the stock, as it jumped from 13% to $25.22 on large volume. The other reputed companies also saw a fall down in their share, IBM had the biggest impact of it as it was down to 4% at $179.80 and the index of Philadelphia semiconductor had a downfall to a rate of 1.2 %. The Nasdaq Composite Index slid 0.99 percent or 25.76 points, or to 2,577.97, the Standard and Poor’s 500 Index witnessed a gain of 2.42 points and the Dow Jones industrial average had a rise upto 0.03 percent or 4.16 points or to 12,107.74. It is important to take a note of the fact that the with respect to this year, the Nashdaq has witnessed a downfall to 2.8 %, while Dow has a rise of about 4.6percent.
The fall of Oracle had a great impact on the other organizations, such as Cisco shed 2.6%, Hewlett Packard shed 1.8%, IBM shed 3.1% and Microsoft shed 1.0 percent.
The investors of Europe doubted the fact that loans taken from the European Central Bank would not be used for the purchase of the Spanish debt as well as Italian debt as it would reduce the burden associated with the providing of the finance once again as far as those countries are concerned, that are in debt.
A well known banking group made that, the comment, that since the rule, which was laid down by the European Bank Authority does not encourage the succumbing to the foreign debt, they would also not anymore expose themselves to sovereign debt.
Mike Shea, a trader and managing partner of Direct Access Partners LLC said that “As investors digest what the ECB is doing, there’s some recognition of the fact that European banks are better off having more money on their balance sheets even if it isn’t being lent out,”
In relevance to the New York Stock Exchange, 59 percent of the companies, stopped its functional operations for the day, in an optimistic position as compared to the Nashdaq, which closed at a reduced 48%.
But there is some good news, as on the basis of the survey of the National Association of Realtors, there was an increase of 4% in the US homes re-sales.
Lawrence Yun, the Chief Economist of NAR stated that “Sales reached the highest mark in 10 months and are 34 per cent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,”.
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