Stocks are sliding deeper into the red in early afternoon trading.
The Dow is now down 124 points or 0.7%. The Nasdaq is down 51 points or 1.2%.
Twitter is leading the way lower with shares down 15%. The company’s lockup expires today, which means its the first day since the IPO that employees can cash in on their stock.
Other stocks that are getting slammed include Netflix (-3.4%), Target (-3.1%), and Amazon (-3.1%).
Tuesdays have generally been a good to be in stocks.
“Coming into today, amazingly, fifteen out of the seventeen Tuesdays of 2014, (88%), have been “up”-days for the market,” noted Rich Barry in the NYSE MAC Desk mid-day update. “In fact, if you only counted Tuesday performance for the S&P 500, on a year-to-date basis, the index would be up a whopping 9%+.”
Unfortunately, there’s little to no economic rationale for this.
So, all things being equal, no one should be surprised that stocks would sell-off today.
Trade Deficit Narrows
Earlier today, we learned that the U.S. trade deficit narrowed 3.6% to $US40.4 billion in March from $US41.9 billion in February.
Including prior revisions, the net effect of this report on GDP is negative.
“[T]he trade figures suggest that the second estimate, due at the end of this month, will show that GDP actually contracted slightly in first quarter,” said Capital Economics’ Paul Ashworth.
Let’s not forget that the trade report is one of the more lagged datapopints.
“Exports of goods and services almost back to November’s all-time record,” said Bank of Tokyo Mitsubishi’s Chris Rupkey. “Don’t worry about a modest downward revision to first quarter’s GDP report as the trade deficit in goods narrowed a little. Exports are rising sharply and that is good for manufacturing and jobs. For the U.S. economy, exports are leading the way. The economy is stronger than you think.”
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