The S&P 500 index opened with a bearish gap on Monday morning, where its opening price was 1674 against the closing price of 1686 on Friday. The concerns regarding the Federal Budget were taken seriously by the investors as one of the adverse consequences could be the shutdown of the federal government if an extra budget is not allocated and the debt ceiling is not extended. Moreover, the federal government operations shut down could lead to the placement of nearly 800,000 federal government employees to temporary unpaid leave.
The S&P 500 index tested its previous support level at the 1666 area after which it bounced back up in the U.S. session and is currently trading at 1678.5 whereas the Dow Jones plummeted by 99 points and tested the 15,185 level on Monday.
P&G falls, while Apple replaces Coca Cola’s Spot
The volatility in the index also caused the investors to turn a bit bearish on other stocks as well where nearly 10 industries were affected due to such a problem. The FMCG giant Procter & Gamble slumped by 1.5% down to $76 a share where as Coca-Cola lost around 1.3% of its share price value after which its stock price is now trading at $37.9.
Another concern for Coca-Cola is that Apple has replaced Coca-Cola as the world’s top brand, followed by the recent humongous sales recorded for new iPhones on its first weekend sale where nearly 9 million iPhones were sold.
Energy sector companies along with consumer staples and the financial firms witnessed bears taking control of the market on Monday where their stocks dropped by around 0.6 percent hence resulting in taking down all 10 sectors’ stocks in the S&P 500 index.
Devon Energy faced significant losses where the stocks are trading at the $57.50 level after losing nearly 2 percent of the share price value, while Phillips also plunged by 2.4%.
This type of sentiment in the market is often called a ‘panic’ where investors often follow other traders on one big situation, irrespective of how a particular company’s stock is performing. Short-selling may be one of the reasons, but another factor behind the bearish movement is the hanging sword of Stimulus tapering that is yet to be done by the Federal Reserve.
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