Political Tensions and Falling Tech Stocks Cause Market Fall

Stock Market Falls Due to Disappointing Performance of Amazon and Ford, and Escalating Tensions between Russia and US

On Friday (25th April, 2014), the stock market witnessed a sharp fall which brought down hopes that were held by investors and traders alike. The downfall may be attributed to two major occurrences – the lack of adequate performance by Ford and Amazon; and the rising tensions between Russia and US over issues concerning Ukraine. Both of these conditions have triggered the devaluation of stocks which have further brought about bearish conditions in the market.

One of the most unpleasant outcomes of this occurrence was the selling of risky assets by investors who were worried about the possible conditions that could develop in the near future. Instead, they shifted their investments to traditional havens such as gold, bonds and stocks that had the potential of providing higher dividends.

The great sell off that was witnessed on Friday was sufficient for pushing the DOW, S&P 500 and NASDAQ into the danger zone for this week. Amongst the stocks that were selling like hot cakes, technology stocks too formed an important part of the sale of assets. It’s interesting to know that the technology stocks had been underperforming for the past 2 months due to their volatile nature. However, due to the present market conditions, the investors and traders were compelled to sell off these stocks.

This was not a good sight for Amazon (the world’s largest online store) devalued its stocks by 10% or $33.32 which resulted in the final value being calculated at $303.83. It was reported in the late hours of Thursday that the first quarter reports for the company have indicated a profit. However, the company officials have expressed their concern that the amount of spending done on investments would probably lead to the incurrence of operating loss which would become evident during the second quarter.

Due to the actions of Amazon, others in the technology sector have also been pulled down and this in turn has made it the worst performing sector in S&P 500. This downfall is pretty evident in the stats of major tech companies, namely Netflix (Fall by more than 6%), Priceline (Fall by more than 5%), Facebook (Fall by more than 5%) and Twitter (Fall by more than 7%). The market is not in a good position as per current information. But what is even more concerning is the fact that the market is reacting more to bad news than the previous year. Everyone has become overly cautious of things and even the slightest of signs of trouble are triggering panic reactions.

The tensions between Russia and US have surmounted to levels where investor sentiments are being affected. The Secretary of State, John Kerry, stated on Thursday that unless the Russians held up their part of the commitment to ease the Ukrainian crisis, Washington would be forced to implement sanctions that could have a diverse impact on some US organizations. Visa fell $10.47, or 5% which led to a final valuation of $198.93 after it warned that the U.S. sanctions were causing Russian banks to alternative services / companies for processing their payments.Russian President Vladimir Putin expressed that the country would work towards creating its very own payment processing system which would relieve some dependency from using standard processing systems. MasterCard stock fell $3.69, or 5 percent, to $70.66 and the news of an independent payment processing system worsened the sentiments of the company.

These market conditions have about serious concerns being raised by traders and investors. They have become excessively sceptical about the ways in which things are going to turn out. While only time will tell the actual outcomes and the course of the market, the best that traders can do right now is to maintain their composure and act wisely after considering various analyses of dynamic market factors. In this situation Stock Charting Software can help you a lot.