Closing Bell: Stocks Enter Negative Territory for June; Eyes on the Fed
Stocks end a difficult week with losses, as all eyes turn toward the Fed.
The Dow Industrials sank 105 points, while the Nasdaq dropped 21. And a day after its second-biggest advance of the year, the S&P 500 lost 9 points. All three major averages are now in negative territory for the month.
June is proving a challenge for consumers too. According to Thomson Reuters and the University of Michigan, sentiment dipped from a six-year high in May. Economists predicted that the gauge would hold steady.
Meanwhile, prices at the wholesale level rose more than expected last month, bouncing back from a big decline in April. The increase was mainly due to higher gasoline prices; excluding energy and food costs, the core rate ticked up just slightly, indicating that inflation pressures remain in check.
The Federal Reserve will take all the data into consideration next week, when it meets to set monetary policy. Investors will be watching closely for any more hints about when Ben Bernanke and company may start winding down their quantitative easing program.
Policymakers may also want to consider the latest warning from the International Monetary Fund. The IMF cut its forecast for U.S. economic growth next year to 2.7 percent, saying spending cuts and higher tax rates could weigh on consumer demand.
Financial stocks were a drag on the broader market today: JPMorgan Chase and American Express were two of the biggest losers on the Dow.
But among all S&P 500 stocks, Game Stop led the way with a 4 percent gain. Investors hope the introduction of the Playstation 4 and Xbox One will boost sales for the video game retailer.
Restoration Hardware surged 16 percent, after reporting a better-than-expected profit in its latest quarter. And Groupon jumped 11.5 percent on an analyst upgrade from Deutsche Bank.
Finally, an outperform rating from Credit Suisse produced a 6-.5 percent bump for SolarCity. The news also gave Tesla shares a boost -– CEO Elon Musk is a major shareholder in the solar panel company.
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