Stocks fall as regional manufacturing slows
The Philadelphia Fed gives a weak report on factory activity. Initial unemployment filings remain unchanged. Facebook's IPO price range is finalized.
Updated at 10:38 a.m. ET
The major averages were slipping Thursday after the Philadelphia Federal Reserve gave a worse-than-expected read on regional manufacturing activity.
Spain raised 2.5 billion euros in a debt auction, but its borrowing costs rose, highlighting worries about the country's economy and raising concerns about Greek debt contagion.
The Dow Jones Industrial Average ($INDU) was down by 25.6 points, or 0.2%, at 12,573 but paring losses. The S&P 500 ($INX) was down by 4 points, or 0.3%, at 1,321. The Nasdaq ($COMPX) was falling by 12.6 points, or 0.4%, to 2,861.
In domestic news, the Philadelphia Federal Reserve said its general economic index fell to minus 5.8 in May from 8.5 in April. It was a big miss, as economists surveyed by Thomson Reuters expected the index to rise to 10.
The Conference Board's report of leading economic indicators for April was also a disappointment. The report showed a decline of 0.1% in April after a gain of 0.3% in March. Economists had forecasts a rise of 0.2% for last month. The Conference Board attributed the drop to rising jobless claims and falling housing prices.
The U.S. Labor Department reported that initial jobless claims were unchanged at a seasonally adjusted 370,000 in the week ended May 12. Economists had forecast a fall to 365,000.
The four-week moving average fell to 375,000 from 379,750 in the previous week.
Continuing claims for the week ended May 5 were 3.265 million, up from the preceding week's level of 3.247 million.
London's FTSE was down 1.5%, and the DAX in Germany was falling 1.2%.
Spain's borrowing costs rose amid fears about the health of its economy and banking system, as well as worries about Greek debt, though its latest debt auction went relatively smoothly, with the country raising its maximum target of 2.5 billion euros ($3.2 billion).
For bonds maturing in January 2015, Spain had to pay an interest rate of 4.373%, up from 2.89% in April. For bonds maturing in April 2016, interest rates rose to 5.106%, up from 3.374% in March.
Spain's gross domestic product shrank by 0.3% during the first quarter, matching its fourth-quarter decline. The final figure matched its preliminary estimate.
"Spain has formally slipped back into recession," Societe Generale analysts said.
Debt contagion fears persisted as the European Central Bank indicated that it will temporarily halt lending to some Greek banks to reduce risk exposure there. ECB President Mario Draghi said in a speech Wednesday in Frankfurt that while the central bank's preference is for Greece to stay in the single-currency bloc, the country might have to break off from it.
Meanwhile, the leftist Syriza coalition, which still dominates the public opinion polls in Greece, remains adamant about loosening the tough austerity measures Greece has had to abide by as part of its European Union and International Monetary Fund bailout deal.
In Asia, the Hang Seng Index in Hong Kong fell 0.3% and Japan's Nikkei average finished up 0.9%.
The benchmark 10-year Treasury was rising 3/32, diluting the yield to 1.754%. The dollar was flat, according to the dollar index.
The June crude oil contract was up 54 cents at $93.35 a barrel. June gold futures were rising $31.10 to $1567.70 an ounce.
In corporate news, CNBC reported that the price range for Facebook's initial public offering has been finalized, citing a source close to the situation. The report says that while Facebook could still price above the expected range, Securities and Exchange Commission regulations forbid companies from pricing too far above what they had disclosed to the public. That means the rule sets a maximum price for Facebook at roughly $45, according to the report.
Wal-Mart Stores (WMT), the world's largest retailer, reported first-quarter earnings of $3.74 billion, or $1.09 a share, up from year-earlier earnings of $3.39 billion, or 97 cents a share. Analysts, on average, were looking for a profit of $1.04 a share in the April-ended period on sales of $110.54 billion. The retailer announced Wednesday that it anticipates second-quarter earnings of between $1.13 and $1.18 a share; analysts are expecting $1.16 a share.
Sears (SHLD) reported first-quarter profit of $189 million, or $1.78 a share, a reversal from a year-earlier loss of $170 million, or $1.58 a share. The latest quarter included about $200 million of gains from the sale of some U.S. and Canadian stores. Sears posted an adjusted first-quarter loss of 31 cents a share, compared with an adjusted year-earlier loss of $1.34 a share. The retailer was expected by analysts to post a quarterly loss of 67 cents a share.
Agilent Technologies (A) announced it is making its largest acquisition to date of Denmark cancer diagnostic firm Dako for $2.2 billion.
Limited Brands (LTD), the specialty retailer, whose brands include Victoria's Secret and Bath & Body Works, said Wednesday it expects second-quarter earnings of 40 cents to 45 cents a share. Analysts polled by Thomson Reuters were looking for a profit of 50 cents a share in the July-ending quarter. For the full year, Limited said it expects earnings of $2.63 to $2.83 a share; Wall Street's current consensus estimate is $2.83 a share.
I did great today with my 401 M(Matress) investments. How did all of you imbeciles do today? I LOVE IT!
DIE FRAUD STREET, DIE!
Jar-- You've switched teams?
Ya, he got a huge signing bonus with his new team and they only had to give up a player
to be named later and a 5th round draft pick.
If I had 100 million I would be so happy that I wouldn't care if I never made a dime on it.
You gotta love that Trickle down, if you are a 1%'er!
Not so good if you are one of the 99% unemployed and looking for a job!
You've just got to know where the trickle comes out of the bottom and put your
bucket there. After a while you just might catch enough of the trickle to make it
work for you.
You just have to look at the definition of trickle and you can understand why
trickle down economics doesn't work.
Previous bubbles, were in periods in which people's optimism was way over the top. Could you point to over optimistic people in this situation?
We are talking about the optimism of dotcom, when income for the companies would have to go up many 1000% for the PE value to be legit. Or the housing bubble, when people thought the price would never go down. Or the savings and loan bubble. Or the great depression when shoe shine boys were buyings stocks.
PE ratios are in line, no sector going off. (okay groupon and facebook dont make sense to me, but not everything has too make sense to me)
Once a bum, always a democrat...
Yes, no division in this counrty at all... and if it is.... it only comes from the left...
Hello - Fiscal responsibilities
And, who do you think will bring this about? The Republicans have not shown fiscal responsibilities in over 10 years.
European Socialism has failed.
Obamnean Socialism will also fail.
It is just a matter if we elect Mitt and it fails that way----OR
We reelect Obama and the whole country goes the way of Greece!!!!!
Its amazing how the market moves up and down with any news on the EU when substantially the Greece and Spain issue just continues to spiral downward. Wishing and Hoping are not a plan, nor is burying your head in the sand.
If the people of a country do not have the will- which is difficult to obtain after years of leadership basically lying to the people- then the problem will not be solved and we can all use their money as heating fuel.
Got a deck to build. Have a great day.
Opportunity rarely comes easy. We have to see it. That requires confidence in ourselves and our abilities, especially to grow and change. Nothing is static. Our bodies. This planet. Everyone and everything is changing all the time. This is life. Tap into this, instead of being afraid of it, work with it, instead of against it. This is were personal power is found.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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