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Markets Drift Despite Some Positive Reports

July 25, 2013 by Leave a Comment

Markets drifted on Thursday amid mixed economic and corporate news around the world and as investors paused to reflect after Wall Street’s failure to make new highs.

In afternoon trading, the Standard Poor’s 500-share index was 0.2 percent higher, the Dow Jones industrial average was unchanged and the Nasdaq composite was up 0.6 percent.

In Europe, the FTSE 100 index of leading British shares ended the day down 0.5 percent even after official figures showed that the British economy grew by a quarterly 0.6 percent in the second quarter, its fastest rate in nearly two years. Germany’s DAX was down 1 percent despite the closely watched Ifo index pointing to solid growth in Europe’s economy. The CAC 40 in France was 0.2 percent lower.

United States economic figures failed to move the markets much, with a bigger-than-expected 4.2 percent surge in durable goods orders in June downplayed because it was largely a result of elevated aircraft sales. And a 7,000 increase in weekly jobless claims was more or less in line with expectations.

The latest run of corporate earnings around the world also failed to excite. Though a number of companies like Facebook have impressed, investors have not shown much willingness to push markets higher on the back of corporate earnings. Among the latest releases, Facebook (shares up 27 percent on Thursday) and General Motors (shares down 0.9 percent) impressed, but the German chemical company BASF (United States-traded shares down 3.1 percent) disappointed.

Some results “are being used as an opportunity to sell at the current highs, creating another opportunity to buy the dips,” said Craig Erlam, market analyst at Alpari.

China’s weak manufacturing figures from Wednesday continued to weigh on sentiment in Asia. China’s slowdown is in large part self-induced. Its leaders are trying to shift the basis of China’s growth away from reliance on exports and industrial investment in favor of consumption, which they hope will be more self-sustaining. That means large stimulus is unlikely.

Japan’s Nikkei 225 stock average shed 1.1 percent, to 14,562.93 points, with the camera maker Canon plunging 5.4 percent after it lowered its full-year profit and sales outlook on Wednesday. Hong Kong’s Hang Seng was off 0.3 percent, at 21,900.96 points, and China’s Shanghai Composite dropped 0.6 percent, to 2,021.17.

Currency markets were fairly lackluster, with the euro 0.2 percent higher, at $1.3230, and the dollar down 0.6 percent, at 99.59 yen.

The latest bout of selling of oil ground to a halt and the benchmark New York rate was 31 cents higher, at $105.70 a barrel.

Article source: http://www.nytimes.com/2013/07/26/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Durable Goods Orders Fall, and Jobless Claims Rise

November 24, 2011 by Leave a Comment

While much of the weakness in durable goods orders came from a big drop in demand for commercial aircraft, a critical category that tracks business investment spending fell by the largest amount since January.

In other economic reports Wednesday, the government said that initial claims for unemployment benefits rose to 393,000 last week, slightly more than economists had expected.

In addition, consumer spending increased 0.1 percent last month, below expectations and the weakest gain in four months. Incomes, however, were up 0.4 percent, which was slightly better than expected.

The overall decline in orders for durable goods was 0.7 percent, following a September decline of 1.5 percent. Orders for core capital goods, considered a good proxy for business investment spending, dropped 1.8 percent, the biggest decline since a 4.8 percent fall in January.

Manufacturing has been one of the strongest sectors in the economy in this subpar recovery, but the sector slowed this year as consumer demand faltered and auto factories had trouble getting parts after the natural disasters in Japan last March.

The October drop in core capital goods — nonmilitary products excluding aircraft — was expected to be a temporary setback. This category has been surging this year, spurred by tax breaks that are allowing companies to write off their investments all in one year as long as the purchases are made before the end of 2011. That has provoked a rush by companies to take advantage of this tax break, which Congress passed in an effort to spur the economy.

For October, orders for transportation products fell 4.8 percent, reflecting a 16.4 percent drop in demand for commercial planes. Orders for autos showed a solid 6.2 percent increase, reflecting solid sales gains in recent months.

Excluding transportation, durable goods orders posted a 0.7 percent increase. This gain reflected increases in areas like primary metals such as steel and heavy machinery.

The small increase in initial claims for unemployment insurance — up 2,000 from the previous week — came after two months of steady declines. The four-week average of applications, which smooths week-to-week fluctuations, fell to its lowest level since April, the Labor Department said.

The downward trend suggested companies are laying off fewer workers.

In the report on consumer spending, the Commerce Department said purchases of durable goods like autos showed a solid increase. But spending on nondurable goods, like food and clothing, fell.

The 0.4 percent increase in incomes in October was the best showing since March. Private wages and salaries drove the gain. The solid increase followed five consecutive months of weak income gains. And subtracting taxes and adjusting for inflation, income rose 0.3 percent in October.

Many Americans chose to save the extra money. The savings rate ticked up to 3.5 percent of after-tax incomes, up from 3.3 percent in September — the lowest level since December 2007, the month the recession started.

The Institute for Supply Management’s manufacturing index grew more slowly in October than September but still remained at a level indicating manufacturing was continuing to expand. Manufacturing, one of the first sectors to start growing after the recession officially ended in June 2009, has posted growth for 27 consecutive months, according to the ISM index.

Also, the Thomson Reuters/University of Michigan consumer sentiment index fell to 64.1 from 64.2 in the preliminary November report, according to a report released on Wednesday. Economists in a Reuters survey expected a final November sentiment index reading of 64.5.

Article source: http://feeds.nytimes.com/click.phdo?i=c3d717198e52764e119bd34b3640e883

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U.S. Durable Goods Orders Rose in July

August 24, 2011 by Leave a Comment

WASHINGTON — Orders for aircraft and autos last month drove up demand in July for long-lasting manufactured goods, the government said Wednesday. Outside of those categories, businesses invested less in factory goods. The Commerce Department reported that overall orders for durable goods rose 4 percent last month, the biggest increase since March. Demand for autos and auto parts jumped 11.5 percent, the most in eight years. Aircraft orders, a volatile category, soared 43.4 percent, after falling 24 percent in June.

Excluding transportation goods, orders rose just 0.7 percent.

Trading on Wall Street was mixed at the start of Wednesday’s session after the Commerce Department report was announced but then turned sharply positive.

A critical category that tracks business investment plans fell 1.5 percent, the biggest drop in six months. That suggests businesses are pulling back on spending. Orders in all other major categories dropped, including computers, electronic goods and machinery.

A durable good is a product that is expected to last at least three years.

Auto production is rebounding after a slowdown caused by the Japan earthquake. The Federal Reserve reported last week that factory output rose 0.6 percent in July, mostly because of an increase in auto production.

A big order by American Airlines helped raise the aircraft sector. American Airlines ordered 100 new Boeing 737 planes with fuel-efficient engines in July.

Manufacturing has been a key source of economic growth since the recession officially ended in June 2009. But it began to slump this spring, along with the broader economy.

Orders fell in April and June, partly because of supply disruptions stemming from the March 11 earthquake in Japan. And a spike in gas prices earlier this year cut into consumer spending, reducing demand for big-ticket items, like computers, appliances and furniture.

Several recent reports suggest the sector could be slowing further. A survey by the Federal Reserve Bank of Philadelphia showed that manufacturing in the mid-Atlantic region contracted in August by the most in more than two years. A Richmond Fed survey released Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not as severe as the Philadelphia region.

Economists predicted further weakness, even as temporary factors fade. Falling stock prices and fear of another recession may persuade consumers and businesses to hold back on big purchases. That could slow orders for industrial machinery, electronic goods and appliances.

Article source: http://www.nytimes.com/2011/08/25/business/economy/durable-goods-orders-rose-in-july.html?partner=rss&emc=rss

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Stocks Lose Momentum

August 24, 2011 by Leave a Comment

Stock indexes had powered ahead on Tuesday, the second consecutive day of gains, as investors scooped up stocks that had become cheaper after recent sell-offs.

But the markets were not as certain on Wednesday, wavering between gains and losses. Gold fell, the benchmark Treasury yield rose slightly to 2.203 percent and financial stocks declined.

A government report Wednesday that showed that durable goods orders rose in July provided little stability. Analysts noted that, considering recent talk of another recession, it would take more than one economic data point to convince investors that the economy was on solid footing.

“Any one report is not going to have real significant impact because the market is looking for a breadth of data,” said Stuart Freeman, chief equity strategist for Wells Fargo Advisors.

Some investors were betting that weak economic data would support the likelihood of further stimulus from the Federal Reserve, whose chairman, Ben S. Bernanke, will speak at the Fed’s symposium at Jackson Hole, Wyo., on Friday. Mr. Bernanke had outlined stimulus options at the same meeting in 2010 in response to the slowdown of the economy.

While those expectations had driven some of the gains on Tuesday, there was little follow-through on Wednesday.

In early afternoon trading, the Standard Poor’s 500-stock index was down 0.2 percent and the Dow Jones industrial average was down 0.2 percent. The Nasdaq composite index was down 0.6 percent.

“There is some trading going on with the expectation that the Fed is going to make some comments that they have got something up their sleeve,” Mr. Freeman said. “I think we are going to be in this volatile sideways moving market” for some time.

Gold, which sagged sharply on Tuesday only to rise in Asian trading, fell further on the Comex exchange. It was down $69.70, or 3.8 percent, to $1,788.60 an ounce. The metal had been used as a safe haven in recent market volatility and risen to record nominal highs.

Jeffrey Nichols, the managing director of the American Precious Metals Advisors, said that the run-up in gold had been “so large in magnitude and fast” that “to have a significant correction here really makes sense.”

“Some of the rally was a function of speculative demand by short-term-oriented institutional traders,” he said, adding that the consequence would be for them to sell, take profits and move on to other instruments. But he said that the long-term economic outlook was basically unchanged.

The Commerce Department reported earlier that overall orders for durable goods rose 4 percent last month, the biggest increase since March. But a category that tracks business investment plans fell 1.5 percent, the biggest drop in six months.

Abigail Huffman, director of research at Russell Investments, said that some of Wednesday’s early gains may have been a result of the durable goods numbers and the market’s momentum from the previous day.

“It is definitely a wait-and-see feeling preceding the Fed meeting,” she said.

Stocks in Europe rose for a third day, after declines in Asian markets, as some investors bet that the Federal Reserve would act soon to strengthen the economy and that the sharp stock market drops earlier this month were overdone.

Adrian Darley, head of European equities at Ignis Asset Management, said that even though some investments now looked cheap, investors lacked confidence.

“There are remaining concerns about global economic growth slowing down,” Mr. Darley said. “The question is whether the sell-off has gone too far. Companies recognize that there is a lot of value out there but investors don’t have a lot of confidence.”

The Euro Stoxx 50 index closed 1.8 percent higher in Europe, while Germany’s DAX index increased 2.7 percent and France’s CAC 40 index rose 1.8 percent. Stock markets in Asia slipped as investors took in the downgrade by Moody’s Investors Service of its rating on Japanese government debt and shrugged off both Tuesday’s surge on Wall Street and fresh efforts by the Japanese government to prop up feeble economic growth.

The Nikkei 225-stock index rose in early trading, but quickly gave up those gains to end the day down 1.1 percent at 8,629.61 points. Similarly, the yen remained persistently strong in the international currency markets, hovering at about 76.60 yen per U.S. dollar.

Moody’s decision to lower its rating of Japan by one notch came as little surprise, as Standard Poor’s had announced a similar downgrade in January and the economic and political challenges facing the country are well known.

Elsewhere in the Asia-Pacific region, the markets slipped, ignoring the firm rally in the American markets during the previous day. Analysts cautioned that the lingering uncertainties about the economy in the United States and debt woes in Europe remained in place and were likely to produce more volatility in coming months.

The key index in South Korea closed down 1.2 percent, the Taiex in Taiwan fell 0.6 percent, and the S. P./ASX 200 in Australia finished 0.1 percent lower.

In Hong Kong, the Hang Seng index was 1 percent lower by mid-afternoon, the Straits Times index in Singapore fell 0.4 percent, and in India, the Sensex was down 0.8 percent by the afternoon.

Julia Werdigier reported from London and Bettina Wassener contributed reporting from Hong Kong.

Article source: http://www.nytimes.com/2011/08/25/business/daily-stock-market-activity.html?partner=rss&emc=rss

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