Stocks teeter after US data

New York manufacturing activity contracts, but consumer prices remain unchanged, industrial output increases and builders' confidence improves. Staples shares skid after disappointing results. Deere is also down after missing estimates.

By Melly Alazraki Aug 15, 2012 9:18AM
Updated at 12:17 p.m. ET

Stocks traded in a narrow range Wednesday, after U.S. consumer prices remained unchanged and New York-area manufacturing activity dropped sharply in July.

The Dow Jones Industrial Average ($INDU) was down 2 points at 13,170. The S&P 500 ($INX) was up 1 point at 1,405. The Nasdaq Composite ($COMPX) was up 12 points at 3,029.

Investors also digested earnings from Target (TGT), Deere (DE) and Staples (SPLS). Meanwhile, JDSU (JDSU), Starbucks (SBUX) and Facebook (FB) helped support the Nasdaq.

On Tuesday, U.S. stocks finished almost flat after being up most of the session. Trading volumes have remained low in this seasonally slow period, and markets haven't exhibited much volatility. For now, investors are also waiting to see whether the Federal Reserve and other central banks will step in with further easing and stimulus measures. A conference at the end of the month at Kansas City Federal Reserve could provide more information.

But as expectations for any central bank action waned, European markets were mostly lower Wednesday as Asian markets ended the day in the red.
US economic data
U.S. consumer prices remained unchanged in July as lower energy prices offset gains in food and other items. Core CPI, which excludes food and energy, rose 0.1%. Economists had expected an increase of 0.2% for both the overall and core price gauges, according to MarketWatch. The muted inflation could support Fed easing.

The Empire State manufacturing index dropped sharply to negative 5.9 in August, the first time in nine months that activity has contracted, and after reaching 17.1 in May. The decrease was larger than expected. Economists had forecast a small decline to 6.0 in August, MarketWatch reports.

Industrial production in the U.S. increased 0.6% in July, the most in three months. The growth was propelled by a pickup in motor vehicle output and a rebound in utility use.

The National Association of Home Builders Housing Market Index rose 2 points in August as builder confidence in the market for newly built single-family homes climbed to the highest level in more than five years on expectations the recovery in housing can continue. Several housing stocks, such as Toll Brothers (TOL), received a boost from the data.

Meanwhile, applications for U.S. home mortgages tumbled 4.5% last week, with demand for new loans -- a leading indicator of homes sales -- down 2% for the fifth week in a row as interest rates held steady, the Mortgage Bankers Association said on Wednesday.

Stocks to watch
Staples (SPLS) shares sank after the office supply chain reported lower-than-expected quarterly results on weak demand. Sales fell 5.5% to $5.50 billion, and net income fell 32% to $120 million, or 18 cents a share, missing expectations for $5.72 billion and 25 cents a share. Staples also cut its profit and sales forecasts for the year.

Deer & Co. (DE) tumbled after the farm-machinery maker reported that fiscal-third-quarter earnings jumped 11% to $788 million, or $1.98 a share, as revenue grew by 15% to $9.59 billion. The results, however, still missed expectations for earnings of $2.31 a share on net equipment revenue of $9.5 billion. The company also cut its view for the year.

Target (TGT) shares rose after the second-largest U.S. discount retailer posted second-quarter profit of $704 million, or $1.06 a share, that topped analysts' estimates as sales gained 3.3% to $16.8 billion. Analysts projected earnings of $1.01 per share. The retailer plans to boost sales growth by opening stores in Canada next year.

Cisco Systems (CSCO) will report fiscal-fourth-quarter results after the close Wednesday. Analysts expect the networking company to report a profit of 45 cents a share, on revenue of $11.62 billion, according to a consensus survey by FactSet.

Starbucks (SBUX) is climbing after Credit Suisse added the coffee retailer to its U.S. Focus List, saying it has one of the largest growth opportunities in the consumer sector. In addition, high growth in emerging markets and margin increases in Europe will also boost the retailer, which has reached a compelling entry point, Credit Suisse said.

  • More analyst call here

Abercrombie & Fitch (ANF) shares jumped despite reporting a mediocre quarter and saying sales would remain weak in the crucial back-to-school and holiday seasons. The teen retailer also said it was raising its share buyback authorization by 10 million shares, to 22.9 million -- just over a quarter of its outstanding shares.

233Comments
Aug 15, 2012 11:21AM
avatar
Which side of the fence? 
If you ever wondered which side of the fence you sit on, this is a great
test! 
If a Republican doesn't like guns, he doesn't buy one. 
If a Democrat doesn't like guns, he wants all guns outlawed. 
If a Republican is a vegetarian, he doesn't eat meat. 
If a Democrat is a vegetarian, he wants all meat products banned for
everyone. 
If a Republican is homosexual, he quietly leads his life. 
If a Democrat is homosexual, he demands legislated respect. 
If a Republican is down-and-out, he thinks about how to better his
situation. 
A Democrat wonders who is going to take care of him. 
If a Republican doesn't like a talk show host, he switches channels. 
Democrats demand that those they don't like be shut down. 
If a Republican is a non-believer, he doesn't go to church. 
A Democrat non-believer wants any mention of God and religion silenced. 
If a Republican decides he needs health care, he goes about shopping for it,
or may choose a job that provides it.
A Democrat demands that the rest of us pay for his. 
If a Republican reads this, he'll forward it so his friends can have a good
laugh. 
A Democrat will delete it because he's "offended". 
Aug 15, 2012 10:19AM
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there's 2 clues to inflation:  prices going up, and packaging sizes going down. 

 

i noted the other day that a package of bacon is now 9 ounces.  years back a package of bacon was 16 ounce. 

 

now a package of icecream would serve the wife and i for several days, a scoop or 2 a day.  now that "package" is good for only 2 days. 

 

if someone doesn't see inflation is occuring, they are quite blind. 

 

>>>>>We don't have any inflation, because we don't have any DEMAND for goods & services! <<<<

Aug 15, 2012 10:05AM
avatar
3 things that need to happen

1. Term limits on Congress - The longer they are in office the more likely to be corrupted by special interests.

2. Balanced budget amendment - We know congress can't stop spending on their own. Either cut spending or raise taxes, no other choices.

3. Get rid of the Executive Order - Our current system has no checks and balances. Get back to original design. 


Aug 15, 2012 10:21AM
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Jeff if I may add a few

 

# 4 - ban lobbying

 

#5 - ban ear marks

 

#6 - pacts, supper pacts or any other form of this nonsense

 

# 7 - ban all campain contributions from companies, unions or any organizations, only personal contributions are allowed at a max of $1000.00 a year.

Aug 15, 2012 9:59AM
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We don't need more stimulus. All stimulus will do is increase inflation. We need inflation between a deflationary 1/2% and 0% inflation. Consumer buying power will increase and employment increase. One of our economic problems is the fed. The fed needs to reduce the money supply, not increase it.

 

The above should tic off all you bankers your the ones making the money from stimulus, not the American people.

Aug 15, 2012 10:11AM
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Do you know what Obama and a sewer rat have in common? Don't answer. It would be easier to tell us what they don't have in common.
Aug 15, 2012 11:32AM
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I have nothing against the rich.  They can spend their money any way they want to, except one.

They should not be allowed to buy elections.  The middle class and poor only get one vote so

why should the rich be able to buy more than one.  And yes the rich include unions or any

other organizaiton that has the wherewithall to swing elections.  I don't care whether it is

democrat, republican, independent, or any other party, it should be one person, one vote and

they shouldn't be for sale.

Aug 15, 2012 10:17AM
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the biggest need at ALL levels of government

 

>>>>>2. Balanced budget amendment - We know congress can't stop spending on their own. Either cut spending or raise taxes, no other choices.<<<<<
Aug 15, 2012 11:49AM
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Anybody note the above headlines that U.S. Homebuilders confidence is at a 5 year high while the amount of mortgage applications is being reported as continuing to decline.  How is manufacturing being reported up for July while the NY manufacturing index dived into negative territory?  How are we expanding the economy when demand for office supplies is declining?  Who are we supposed to believe is correct with statistics?  We are in a cycle of an earnings/ employment bubble that will eventually be pricked like the real estate and stock market bubbles.  The earnings/employment bubble works in reverse to the other bubbles in that in order to maintain stock prices, employment is cut as this is the only controllable cost, unlike raw materials.  To keep profits up, unemployment goes up, which causes less buying so there is more unemployment.  Eventually, the stock market realizes it at point of no return, growth is not real but money-print driven and everyone gets out and the bubble is pricked.  The cycle will be accelerated by the eventual Obama tax increases and his medical plan.
Aug 15, 2012 10:29AM
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Seems to me the only market mover is whether or not the Fed will print more money.  Why should economic conditions & company performances affect it at all.  So sad.
Aug 15, 2012 11:16AM
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Not a fan of Rand, or the Koch brothers -- but I will take them everyday of the week over Bill Ayers, George Soros, Jerimiah Wright, Frank Marshal Davis, Karl Marx, Hugo Chavez, Mao, Trotsky, Lenin and Stalin.

Aug 15, 2012 11:58AM
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Nothing on MSN about this;

(Reuters) - A massive police presence restored calm overnight on Wednesday to the French city of Amiens, where arson and gun attacks on police have added law and order to the deep economic problems President Francois Hollande must confront.

The Socialist leader pledged to do all in his power to stamp out unrest two straight days of disturbances in which after 17 police were injured, some by shotgun pellets.

An extra 100 officers were sent to the Fafet district in northern Amiens late on Tuesday, bringing to 250 the number of police patrolling there versus the usual 30, officials said.

Aug 15, 2012 11:38AM
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Consumer confidence in the TOILET=Home builders confidence IMPROVES ? We the middle class demand a $ 500,000 bailout each!  Go figure  the Criminal Banking Cartel got billions of our TAX dollars !
Aug 15, 2012 10:21AM
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The Stock Market is not the end-all to be-all indicator on how our economy is doing. If it were, the GW years would have meant that he was an economic (economy) rock star because the DOW got above 14,000 on his watch. The Market has billions of dollars automatically flowing into it from pension funds, mutual funds, money market accounts, ETF, the FED, etc... The Market is inflated. Investors all around the world have no other "safe" place to go with their money. Hence, it is not a good barometer - - it will go up and it will go down. Nonetheless, when it becomes apparent that Romney and Ryan will win in November, I expect to see the DOW to SOAR... I expect to see the signs that America is open for business again (and are welcomed to the table) and to see umemployment down to 7% by next summer.

Aug 15, 2012 11:49AM
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What's this stuff Biden is talking about chains and such. Did he get out of his? I'm sure he escaped - maybe he had help from the GOP to get out of the basement.
Aug 15, 2012 9:42AM
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So much for Benjamin Lawsky.  Looks like he's just another "protect the chosen one's" regulator.

Down the drain we go.....
Aug 15, 2012 11:16AM
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Q. How come Banks can claim bankruptcy if they become insolvent but homeowners with a $200,000 mortgage on a home now worth $100,000 can't? 

A. Bank Lobbyist have life long congressmen in their pocket making sure they are being protected.

The bailouts should have come with a stipulation that all insolvent mortgages be refinanced. 
Aug 15, 2012 10:43AM
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Poor obama, he only has 83 more days to fund raise... Romney and Ryan are offering the best Welfare Program ever designed -- a job. Unlike obama, who has withdrawn the actively seeking work requirement for welfare recipients, conservatives know that real compassion, and real caring comes when you set people free -- not bound them with the shackles of dependency.
Aug 15, 2012 10:47AM
avatar
The American economy and JOBS is flat and losing and has been for almost 4 years.......Don't believe what you read!!
Aug 15, 2012 12:27PM
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