Stocks slip on P&G results, economic fears

Procter & Gamble drags the Dow down 38 points as profits fall from a year ago. July auto sales are mixed. Pending home sales fall. Oil tops $82.

By Charley Blaine Aug 3, 2010 2:56PM

Updated at 8:50 p.m. ET

 

Stocks slipped today after Dow component Procter & Gamble's (PG) earnings disappointed and weaker-than-expected pending home sales and mixed results on auto sales suggested continued consumer caution on big-ticket purchases.


The Dow Jones industrials ($INDU) were off 38 points to 10,636. The Standard & Poor's 500 Index ($INX) slipped 5 points to 1,120, and the Nasdaq Composite Index ($COMPX) was off 12 points to 2,284.

Also at work: simple profit-taking after Monday's big rally that saw the Dow jump 208 points and worries about the picture that Friday's important jobs report will paint about the economy.

Energy stocks were higher as crude oil climbed to $82.55, up 1.5% on the day. Metals stocks were lower as copper and gold prices were basically flat at $3.36 a pound and $1,187.50 an ounce, respectively. The yield on the 10-year Treasury note fell to 2.914% from 2.963% on Monday.

The dollar was lower against the British pound, the euro, the Japanese yen and the Canadian dollar. The U.S. Dollar Index, which measures the greenback against a basket of currencies, was off to 80.71. The index has fallen 8.8% since peaking on June 8. 


Futures trading suggests U.S. stocks will open modestly lower on Wednesday.

While the market was lower, the S&P 500 was still in the black for the year and was trading above its 200-day moving average. That suggests some market support.


There was an additional concern about this technical condition. With the S&P 500 at around 1,120, the broad-based index has regained about half of its loss between October 2007 and March 2009. It's hit that level three times since then and can't seem to move much above it. 

Putting a damper on investor enthusiasm were reports showing pending home sales and factory orders dropped 2.6% and 1.2%, respectively. Analysts had expected pending home sales to gain.

Meanwhile, consumer purchases were unchanged after a 0.1% gain the prior month that was smaller than previously estimated, the Commerce Department said.

Incomes didn’t increase for the first time since September and the savings rate increased to the highest level in a year.


After the close, shares of Anadarko Petroleum (APC), CBS (CBS), Electronic Arts (ERTS) and Priceline.com (PCLN) were higher after earnings reports cheered Wall Street. Priceline, in fact, was up 13.9% to $262.63 after hours from a regular close of $230.67.


Shares of Whole Foods Market (WFMI) were up 1.4% to $39.49.

Energy prices -- New York close
 

Tues.

Mon.

Month chg.

YTD chg.
Crude oil 

$82.55

$81.34

4.56%

4.02%
(per barrel)











Heating oil

$2.2000

$2.1538

5.36%

3.99%
(per gallon)











Natural gas 

$4.6390

$4.7010

-5.77%

-16.74%
(per mil. BTU)











Unleaded gasoline

$2.1935

$2.1685

3.35%

6.85%
(per gallon)











Retail gasoline

$2.7260

$2.7350

-0.55%

3.30%
(per gallon; AAA)












P&G, Dow Chemical weigh on stocks
Procter & Gamble and Dow Chemical (DOW) were off 3.4% to $59.94 and 10% to $25.50, respectively,  after earnings trailed estimates.


But pharmaceutical giant Pfizer (PFE) was up 5.6% to $16.34 after reporting better-than-estimated earnings. Health care stocks were up generally and were the strongest sector of the S&P 500. The Select Sector SPDR-Healthcare exchange-traded fund (XLV) was up 0.9% to $29.36.

Only nine of the 30 Dow stocks were higher this afternoon, with Pfizer the leader. At the same time, only 30 stocks in the Nasdaq-100 Index ($NDX.X) were higher, led by Cognizant Technology Solutions (CTSH), a big technology services company, up 9.4% to $60.62 on much-better-than-expected earnings.

The index was off 5 points to 1,894.

Auto sales are mixed
Auto sales for July haven't been as robust as analysts had expected. One culprit: consumer reluctance to make big-ticket purchases in a weak economy.

Sales for General Motors and Ford Motor (F) missed analyst estimates, although they were higher than a year ago. Ford shares dropped in response. Chrysler sales, up 5% from a year ago, were slightly ahead of estimates.

The results came as major automakers reported sales for the month. Analysts have been expecting auto sales to run at an annualized rate of 11.9 million units.

Toyota Motor (TM) and Honda Motor (HMC) both reported lower sales. Both said a year-ago's sales were helped by the Cash for Clunkers program, which gave buyers a tax credit for trading in older, less fuel-efficient vehicles.

BP starts test to plug Gulf well
BP's (BP) shares were up 1.5% to $40 this afternoon after the oil giant reported it had begun a critical test at its blown-out oil well.

The test is in advance of a "static kill" that it hopes will permanently kill the leak.

The test will gauge ability to pump heavy drilling mud and cement into the ruptured well. Based on results, the static kill could start later today.

Short hits from the markets -- New York close
 
  Tues.

Mon.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.150%

0.140%

7.14%

200.00%
5-year Treasury note 

1.554%

1.640%

-2.75%

-42.14%
10-year Treasury note

2.914%

2.963%

0.24%

-24.17%
30-year Treasury bond

4.046%

4.067%

1.73%

-12.82%
Currencies







 

 
U.S. Dollar Index

80.684

81.055

-1.19%

3.15%
British pound

$1.5949

$1.5896

1.64%

-1.40%
(in U.S. $)











U.S. $ in pounds

£0.6270

£0.6291

-1.62%

1.42%
Euro in dollars

$1.3235

$1.3180

1.38%

-7.66%
(in U.S. $)











U.S. $ in euros

€ 0.7556

€ 0.7587

-1.36%

8.30%
U.S. $ in yen 

85.98

86.40

-0.77%

-7.54%
Canada dollar

$0.977

$0.977

0.49%

2.74%
(in U.S. $)











U.S. dollar 

$1.024

$1.023

-0.41%

-2.66%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,187.50

$1,185.40

0.49%

8.33%
(per troy ounce)











Copper

$3.3585

$3.3895

1.42%

0.36%
(per pound)











Silver

$18.4220

$18.4190

2.33%

9.36%
(per troy ounce)











Corn

$3.8950

$3.9050

-0.83%

-6.03%
(per bushel)











Crude oil 

$82.55

$81.34

4.56%

4.02%
(per barrel)










 


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[BRIEFING.COM] The stock market ended the Tuesday session on a lower note after generally upbeat earnings took the back seat to geopolitical concerns. The S&P 500 (-0.5%) and Nasdaq Composite (-0.1%) ended on their lows, while the Russell 2000 (+0.3%) displayed relative strength.

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