Stocks pare losses after weak China, eurozone, US data

Reports show contraction in China's manufacturing activity and in the eurozone's private sector. US jobless claims fall by 3,000, but the level remains high. The Philly Fed's manufacturing index improves slightly, while leading indicators slip.

By Melly Alazraki Sep 20, 2012 9:23AM
stock marketUpdated at 12:20 p.m. ET

U.S. markets trimmed earlier losses but remained lower after U.S. reports showed jobless claims fell less than forecast, while the Philadelphia Federal Reserve Bank's gauge of regional manufacturing activity remained sluggish. Investors were also concerned about the global economy after weak data from China and eurozone.

The Dow Jones Industrial Average ($INDU) was down 11 points at 13,567. The S&P 500 ($INX) was down 4 points at 1,458. The Nasdaq Composite ($COMPX) was down 12 points at 3,171.

In the U.S., applications for jobless benefits fell by 3,000 to a seasonally adjusted 382,000 in the week ended Sept. 15, the Labor Department said Thursday. Economists expected claims to drop to 375,000, according to Levels near a two-month high suggested some weakening in the labor market.

The four-week  average, which economists see as a better gauge, rose by 2,000 to 377,750, the highest level since late June. It was the fifth week of increases.
The Philadelphia Federal Reserve Bank September business activity improved slightly to minus 1.9 from minus 7.1 in August. Economists forecast a reading of minus 4, according to The reading, however, remained negative, indicating a contraction. The index has been in negative territory for five straight month.

Leading economic indicators ticked down 0.1% in August, slightly below economists' forecast of no change. Meanwhile, the longer-term trend remained positive. U.S. economic growth is "unlikely to change much" in the near term, the Conference Board said Thursday.

Manufacturing in China contracts again
China's manufacturing activity contracted in September for the 11th straight month. The preliminary HSBC China Manufacturing Purchasing Managers Index rose to slightly to 47.8 in September from a final reading of 47.6 in August.

While the uptick suggests stabilization, the level is still in the contractionary territory of below 50. The pressure on the manufacturing industry in the world's No. 2 economy likely also indicates it remains on track for a seventh quarter of slowing growth.

Chinese stocks stumbled to their lowest level since February 2009 to lead Asian markets lower after the data. It didn't help that Japan's trade deficit widened in August from a month earlier as both exports and imports fell. Japan's data, however, was above expectations.

Eurozone private sector also contracts
In the eurozone, private-sector activity also contracted. The September index fell to 45.9 from 46.3 in August, below forecasts for 46.7 This was also the fastest pace of contraction since June 2009, despite some positive signals recently out of Germany, the region's largest economy.

European stock markets took a beating after the release of the Chinese and European data.

Stocks to watch
Bank of America (BAC) is accelerating a broad cost-cutting plan and has set a target of shedding 16,000 jobs by year's end, The Wall Street Journal reported. After the cuts, the bank will no longer be the largest employer in the U.S. banking sector.

Rite Aid (RAD) reported a narrower second-quarter loss of $41.4 million, or 5 cents a share, as revenue dipped slightly to $6.23 billion. Wall Street analysts had expected the company to lose 7 cents a share on revenue of $6.2 billion.

Nike's (NKE) board has approved an $8 billion share-buyback plan over the next four years.

Norfolk Southern (NSC) shares fell after the second-biggest eastern U.S. railroad  reported that its third-quarter profit missed analysts' estimates as a result of dwindling volumes.

Trulia (TRLA), the real-estate information site, priced its initial public offering at $17 a share, reportedly raising more than $100 million. Shares are set to open for trading on the New York Stock Exchange this morning.

Adobe Systems (ADBE) advanced after the software maker issued a weaker-than-expected fiscal-fourth-quarter profit outlook after Wednesday's close.

Bed Bath & Beyond (BBBY) shares slumped after the retailer late Wednesday reported second-quarter earnings that fell short of forecasts.

Green Mountain Coffee Roasters (GMCR) shares fell as Starbucks (SBUX) rolled out its Verismo-branded line of single-serve coffees, along with a selection of electric brewers. 

CarMax (KMX) said its second-quarter profit increased slightly to $111.6 million, or 48 cents a share, missing analysts' expectations.

Sep 20, 2012 10:21AM

HP cutting 29,000

AA cutting 11,000

BAC cutting 16,000

RIM 3000

July Manufacturing layoffs 44,900

And more tens of thousands on the way.


Here we go again boys and girls!


Sep 20, 2012 9:55AM
Rigged, rigged, rigged!!! Gone are the good old days when the markets would move based on fundamentals. Now we have an open ended stimulus that enriches the bankers and hedge fund managers while we watch our future prospect for prosperity get trampled into the dirt. I wonder if the public would understand the implications of deficit spending and perpetual trade deficits if they got a bill in the mail from Uncle Sam.
Sep 20, 2012 11:25AM

let take a little poll here.


thumbs up if you believe there is too much money in politics.


thumbs down if you believe there is just enough or not enough.


This is not a liberal or conservative question.  Is is bipartisan

Sep 20, 2012 10:15AM
I f Obama gets re-elected .....gas will spike like you have never seen it........I also beleive he, Obama will totally forget about the poor/uneducated/immigrants.....wait and see.....Obama is after a 1 world order!!!! He is arrogant and only interested in himself!!! HE ONLY WANTS YOUR VOTES!!!!
Sep 20, 2012 9:56AM
Some 6 weeks ago I used the ropadope analogy to describe the Romney campaign.  I am now even more convinced of the effectivenss of this strategy. As we near d-day 11/6/12 we will see a giant sea change in Americas political appetite.  Americans will become turned off by the millions by the dogma of the Liberal Democrats.  They will begin to avoid the stench of the liberal biased media as we get closer to voters day.  This philisophical stench the two have created will turn on them like those folks have never imagined. The bias and stupidity of the liberal media will be the Obama campaigns achilles heel, and Obama will not be able to escape that horrible stink.  For those of you who are unaware of the tremendous character of Mr.  Romney  let me explain. The company Bain Capital, which Romney started,  is regarded as the most prominent firm young business graduates from all over the world would love to be able to work at.  You will never hear this man boast or brag of anything he has done.  He  passes the accolades on to others.  He  gives credit for his success to his employees, his family, and his faith.  No spiking the ball for this man.
Sep 20, 2012 10:12AM
who does this describe.........not worried about the short term economy./letterman show, new $1200 tax, if you don't carry demanded health care, inflation, no jobs,????? This man will smile at you to make you like him....and all th while............I don't think he has a clue and is totally out of touch....his name is OBUMA!!!!
Sep 20, 2012 10:28AM

First time unemployment claims at 382,000 for previous week.  Only 3,000 less than previous weeks' UPWARD REVISED NUMBERS!


This is the 5th week of INCREASES in first time claims.


Bank of Mexico , I am sorry, I mean America is laying off an additional 16,000 between now and year end.  Happy Holidays to BoA employees, with more to come in 2013-2015.  I was going to say Merry Christmas, but I might offend someone, although it is OK for them to offend me!


The Attorney General Eric (Liar) Holder knew nothing about Fast And Furious- why is he still the Attorney General if he does not know what is going on.  I believe President Obama is making one of the peasants take the fall.  If this happened under Bush, I believe the same way, so don't call me racist.  We have a Border Patrol agent dead, and it is swept under the carpet.  Sounds like Mexico and not America!


Boy am I rambling today, but I am what you called somewhat pissed off with all of this.


Us part timers with no health care are lucky to have what we have, but it still is hard to sleep when you know a hospital visit can ruin you financially.


Everyone have a great day.  I love all of you, but politically some of us are different, and that is just the way it is. 

Sep 20, 2012 10:20AM

I'm thinking both parties should be against illegal imigration and amnesty for them.

Dems - they lower the wages of workers and I don't think Unions are happy about that

Repubs - they skew the free market, how can you have a free market with 2 sets of workers?

Americans - this is one sector the government should be hiring in.  Inspectors for illegals in the workplace.  Increase the fines and the number of inspections and you will see a bunch of illegals leave on their own as they will be here for nothing.  Then the discussion about deportming millions will be about a much smaller number and may actually be possible.

Sep 20, 2012 9:43AM

there's no telling what the truth is in china since it's a controlled comunist country


>>>>China's manufacturing activity contracted in September for the 11th straight month.<<<<

Sep 20, 2012 9:51AM
Don't worry, be happy. We are going to get rid of odumbo in November.
Sep 20, 2012 11:09AM
Sep 20, 2012 10:35AM
How is this race close.  Job reports are poor.  The Unemployment rate is high.  The debt is through the ceiling.  We lost our AAA rating.  Gas prices continue to rise.  I don't believe that this race is close.  Romney will win easily.
Sep 20, 2012 11:28AM
Amazing how little attention to the unemployment numbers have received from the mainstream media today. It is not even on MSN website's main page. In addition to the "experts" missing their anticipated number, the number reported last week was also off by 3,000 more filing than reported. Perhaps that sound familiar?? That's because each week they report a number that looks better than it is only to say "last weeks number was off by..." and it goes unnoticed whereas if the number would have actually been reported with the additional number of those filing, it would be terrible for the Obama administration - or any administration.
Sep 20, 2012 10:07AM
Love how these puppets throw jobless claims fell by 3000 followed by B of A plans to shed 16,000!  Those 16,000 shed jobs may just end up being new jobless claims have no idea why I bother with MSN Money!
Sep 20, 2012 10:42AM
You gatta love all of this Chicago Style Hope and Change during our third Summer of Recovery! I think that those green shoots and signs of life the Jimmy Carter Obama spoke of over the past several years was in reference to his home grown ditch weed that he smokes! This dude must be returned to civilian life come Jan 2013. Our country will not survive 4 more years of the Democrat Rule, courtesy of the Socialist in Chief, Barack Hussien Obama mmm mmm mmm!
Sep 20, 2012 11:44AM
US Median Household income today - 50 thousand and change. Lower than 1995 when gas was around $ .99 a gallon. World leader to future Third world in less than a generation - Thanks to fellow voters and politicians.
Sep 20, 2012 10:07AM
Both FedEx and Norfolk Southern are giving us some pretty dismal forecasts.  Philly Fed Survey came in negative for 5th month in a row.  Activity in China and Europe also contracting.  While they aren't brutal numbers, this is still just too much negative news for the market this morning, and we'll probably play games with 13,500 and 1450 for the rest of the day.
Sep 20, 2012 9:54AM
SteveG - I can't trust our government's economic numbers, why would anyone trust any other governments?  You make an EXCELLENT point.

Evil Chris - You may be correct, buy low, sell high is the way to make money.  But it is important to understand the business' you are investing in.  Foreign investments can reap large rewards.  Just be aware  accounting standards are different, and some countries have far more government meddling in their business'.   I kinda use this rule, NEVER invest in anything where government is a partner or owns a share.  If they do they are the senior partner.  Invest in business' you understand. 

Sep 20, 2012 11:04AM
B of A cutting 16,000, American Airlines axing 4,000, Coal mines in Va and PA cutting 1,200. I could go on an on but this kind of reality kills my Kool-aid buzz. Because I've been promised by Obama that we are riding high during his Summer of Recovery, version 3.12. The Anointed One would not lie to us, would he? ....................would he??????
Sep 20, 2012 11:15AM

Empty chair,

Obviously you don't understand that labor participation rate. It only includes only those individuals who are of working age. If your labor force is smaller makes no difference it's still 100% of those who are of working age 16 to 65. And in case you didn't notice more people don't have the money to retire and many retired have to take menial jobs to survive.

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