On Tuesday morning, the shares of Alibaba Group (BABA, -0.81%) declined by 2.9 percent, hitting its lowest price in its five and a half month history during the trading session. This decline came as the Chinese e-commerce giant said that it would fully cooperate with the government in Taiwan which had requested Alibaba to withdraw from the country as a result of concerns regarding the Chinese ownership. Alibaba stocks, which started trading on the 19th of September last year, declined to an intraday low of $81.26. This is 32 percent lower than the intraday peak the company reached on the 13th of November when share prices were at $120. Despite this decline, the shares of the e-commerce giant are still 20 percent above the company’s IPO price of $68. On the 29th of January this year, Alibaba reported disappointing fiscal third quarter sales and since then, the stock has declined 17 percent. Since this date, Alibaba has been under scrutiny by regulators as a result of selling fake goods on its site.
U.S. stocks declined on Tuesday with the Nasdaq index retreating from the significant 5,000 level reached on Monday. This came in response to poor growth in monthly car sales which saw a big decline in the shares of Fiat Chrysler and Ford. The cold weather in February was cited as the cause of these poor sales. Meanwhile, investors turned their attention to the speech made by Israeli Prime Minister Benjamin Netanyahu regarding the pending nuclear deal between the U.S. and Iran. This speech prompted investors to be concerned regarding potential geopolitical risks abroad. At the close of trading, the Dow Jones Industrial Average (DJIA) dropped 0.5%, or 85.26 points, at 18,203.37. This blue chip index declined as much as 146 points during the session and 24 of the 30 blue-chip companies that make up the Dow ended in the red. Also on the downside was the S&P 500 index (SPX) which lost 0.5%, or 9.61 points, to close at 2,107.78. An increase in oil prices pushed up the energy sector yet 8 of the index’s ten sectors closed lower. Meanwhile, the Nasdaq Composite Index (COMP) pulled back from its record level of 5,000 and dropped 0.6%, or 28.2 points, at 4,979.90. Also, the CBOE volatility index advanced 11 percent on the day.
In thin trade on Tuesday, the U.S. dollar (USD) traded lower in a session marked with no major U.S. economic reports. On Monday, the greenback was positively impacted after data showed that the manufacturing activity in the U.S. expanded in February which also supported expectations for interest rate hikes. In forex trading, the euro held steady and the EUR/USD traded at 1.1186. This came after the Employment Ministry in Spain reported that the unemployment number declined by 13,500 in February after rising 78,000 in January. Analysts were expecting an increase of 10,500 in February. Also, data showed that retail sales in Germany advanced 2.9% in January beating expectations for only a 0.4% increase. Against the Japanese yen, the USD traded lower with USD/JPY at 119.61, down 0.45% while the British pound held steady with GBP/USD at 1.5374. Meanwhile against the currencies in Australia and Canada, the greenback traded lower with AUD/USD up 0.87% to 0.7833 and USD/CAD at 1.2442, down 0.77%. Also, the U.S. dollar index was down at 95.33, down 0.20%.
In Asian trading on Wednesday, crude oil prices reversed their downward trend and climbed higher. This came in response to inventories data released by the American Petroleum Institute. Their data showed that stocks of crude oil rose by 2.9 million barrels last week. Also, data showed that gasoline stocks gained 530,000 barrels while distillates fell by 296,000 barrels. Investors have now turned their attention to the report by the Department of Energy in the U.S. which is due today. As a result, WTI crude oil for April delivery traded at $50.29 a barrel, up 0.40 percent on the NYMEX. Also, Brent crude for delivery in April rose 1.04, or 1.73%, to trade at $61.23 a barrel on the ICE Futures Exchange in London on Tuesday.