WESTON, Fla., Aug. 6, 2004 (PRIMEZONE) -- Financial and economic data has slammed stocks in recent sessions, with both the Dow and the Nasdaq slipping below key levels. And technology shares were mixed as results fueled concerns over the pace of earnings growth in the sector that has been at the forefront of the market's ascent over the past year. The software and semiconductor arenas have been the most volatile, swinging with each corporate announcement. The Nasdaq Composite was up down 23.52 points, to 1,798.11 after dipping heavily in the previous session, while the Dow Jones industrial average was lower by 73.74 points, to 9,889.29.
Also back at the forefront of investor's concerns is the price of crude oil futures, which seem intent on piercing the $45 mark, and is threatening to reach $50. OPEC helped ease the price of crude back below $42 per barrel the last time it peaked, but many analysts feel they can only do so much going forward. The price of crude oil fluctuates and rises as trouble continues in the U.S.'s efforts in Iraq. Also damaging investor confidence were Commerce Department figures showing the U.S. trade deficit recently widened by 9.1 percent to a record $46 billion, much higher than what analysts were expecting.
Stocks on the move include Entravision Communications Corporation (NYSE:EVC) which reported financial results for the three- and six-month periods ended June 30, 2004.
NVIDIA Corporation (Nasdaq:NVDA) which reported financial results for the second quarter of fiscal 2005 ended July 25, 2004.
VistaCare, Inc. (Nasdaq:VSTA), a leading provider of hospice services in the United States, which reported results for the second quarter ended June 30, 2004. Results for the quarter were impacted by the Company's decision to accrue $6.2 million in the quarter for its Medicare cap reserve (Cap) as well as increased SG&A expenses associated with growth of the company's sales organization. During the quarter, the company also accelerated its new program development activities. In addition, the company announced the signing of a preferred provider agreement with Benchmark Assisted Living LLC, one of the premier providers of assisted living services in New England, designed to foster future patient referrals.
And MCI, Inc. (Nasdaq:MCIP) which reported its operating results for the three-month period ended June 30, 2004 (second quarter). Revenues in the second quarter were $5.2 billion, a decline of 4 percent sequentially and 15 percent from the same period last year.
The Federal Open Market Committee has already raised rates once, but it was in a previous meeting on May 4, 2004, where the FOMC changed its tune, saying in its statement that "The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal," the FOMC said in its statement. "Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured."
In plain terms The Fed was saying that conditions have improved to the point that rates can start moving up from their current historically low levels, but will probably do so at a measured, and even pace . . . no 50 and 75 basis point hikes in the near future. The Fed also said it "continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity." And they held true to the market's expectations last week, at the culmination of their latest meeting. Most analysts expect rates to continue moving higher, though slowly, for the next couple of years.
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