Stocks Sharply Lower After Disappointing Philly Fed ReadingStocks have extended their initial downside and are notably lower in mid-morning trading on Thursday, as traders are digesting a disappointing reading on Philadelphia-area manufacturing activity, the latest in a mixed batch of economic data on the day.
The markets came under pressure on news that the pace of growth in manufacturing activity in the Philadelphia-area unexpectedly slowed for the second consecutive month in July.
The Philadelphia Federal Reserve said its diffusion index of current activity fell to 5.1 in July from 8.0 in June, although a positive reading indicates continued growth. The decrease came as surprise to economists, who had expected the index to edge up to a reading of 10.1.
Similarly, the New York Fed said its general business conditions index fell to 5.1 in July from 19.6 in June. Economists had been expecting the index to edge down to a reading of 18.0.
Also today, the Labor Department revealed that initial jobless claims came in at 429,000 for the week of July 10th, down 29,000 from the previous week's revised total of 458,000. Economists had expected the measure to come in at around 450,000.
In a separate report, the Labor Department said that its producer price index fell by 0.5 percent in June following an unrevised 0.3 percent decrease in May. Economists had been expecting a much more modest decrease in prices of about 0.1 percent.
Excluding decreases in food and energy prices, the core producer price index edged up by 0.1 percent in June after rising by 0.2 percent in the previous month. The modest increase in core prices came in line with economist estimates.
In other economic news this morning, the Federal Reserve reported that that industrial production edged up by 0.1 percent in June after surging up by an unrevised 1.3 percent increase in May. The modest increase came as a surprise to economists, who had expected production to come in unchanged.
Early on, some optimism was present in the futures markets after J.P. Morgan (JPM) said its second quarter profit jumped by 76 percent to $4.8 billion, resulting in earnings of $1.09 per share. Meanwhile, revenues fell by 8 percent to $25.61 billion. On average, analysts projected the firm to earn $0.74 per share on revenues of $25.81 billion.
The major averages have slowed their drop in recent trading but are lingering near their session lows. The Dow is down 105.99 points or 1 percent at 10,260.73, the Nasdaq is down 25.11 points or 1.1 percent at 2,224.73 and the S&P 500 is down 11.69 points or 1.1 percent at 1,083.48.
Sector News
Banking stocks are among the worst performers in the early going, with the KBW Bank Index sliding by 2.4 percent. The decline is taking the index further away from Tuesday's six-week closing high.
Trucking, steel, airline and oil service stocks are under pressure amid what has become a broad-market sell-off.
Notably, the Philadelphia Oil Service Sector Index is down by 1.5 percent, although it remains rangebound. The weakness among oil service stocks comes as the price of crude futures is down by $0.45 to $76.59 a barrel.
Stocks Driven By Analyst Comments
Despite the weakness in the markets, Cognex (CGNX) is moderately higher after Robert W. Baird upgraded the stock from Neutral to Outperform. Shares are currently up by 0.7 percent after setting a two-week intraday high in earlier trading.
Meanwhile, Juniper Networks (JNPR) is sharply lower after Oppenheimer downgraded the stock from Outperform to Perform. The stock is down by 2.8 percent, falling from its best closing price in six weeks, set in the previous session.
Other MarketsIn overseas trading, stocks across the Asia-Pacific region fell sharply on Thursday. Hong Kong'sHang Seng Index slid by 1.5 percent, while Japan's benchmark Nikkei 225 Index declined by 1.1 percent.
The major European markets have also moved notably lower. The U.K.'s FTSE 100 Index and theGerman DAX Index are down by 0.6 percent and 0.4 percent, respectively, while the French CAC 40 Index is down by 1.6 percent.
In the bond markets, treasuries are seeing notable strength amid the weakness on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.997 percent posting a loss of 5.3 basis points.
No comments:
Post a Comment