Stocks drop on weak ISM report

The Dow dips below 13,000 after a key manufacturing index declines. Ford, GM and Chrysler post sales gains. Europe is in focus ahead of an ECB meeting. Netflix sinks on an Amazon streaming deal.

By Melly Alazraki Sep 4, 2012 9:20AM
stock marketUpdated 12:25 p.m. ET

Stocks fell Tuesday after U.S. manufacturing declined in August to its lowest level since July 2009. Also in focus are a European Central Bank meeting later this week and U.S. employment numbers. The Dow was hovering around 13,000 and the S&P near 1,400.

The Dow Jones Industrial Average ($INDU) was down 93 points at 12,998. The S&P 500 ($INX) was down 8 points at 1,399. The Nasdaq Composite ($COMPX) was down 19 points at 3,048.

US data in focus ahead of Fed meeting
U.S. August manufacturing PMI fell slightly to 49.6 from 49.8 in July, the Institute of Supply Management reported. Economists expected the index to tick up to 50 from 49.8, according to Briefing.com. A reading below 50 indicates a contraction in manufacturing activity, while a reading above 50 indicates expansion. It was the third straight month of contraction.

July construction spending declined by 0.9%, the Commerce Department said. Economists had forecast a rise of 0.5%, according to Briefing.com, after a rise of 0.4% in June.

Car manufacturers have been releasing their U.S. car and truck sales for August. Sales are expected to increase by 16% to 20% overall, to an annual rate of 14.2 million vehicles, as better financing deals and an improving housing market encourage consumers to replace aging cars and trucks, Reuters reports. July figures were disappointing.

More U.S. economic reports are due throughout the week, with nonfarm labor data released Friday. Those numbers will be watched carefully, as they are likely to affect the Federal Reserve's decision regarding more stimulus. The Fed's next policy meeting is next week. On Friday, stocks rallied after Fed Chairman Ben Bernanke said there's room for more stimulus.
But first, ECB meets
Meanwhile, however, the ECB is taking center stage at its next meeting Thursday. It's been some time since markets have anticipated the ECB's announcement of a bond-buying plan to help lower borrowing costs of distressed nations. Investors, however, worry ECB President Mario Draghi will fail to outline details of the plan until a better indication comes out of Germany.

Draghi did say late Monday the ECB could buy bonds with maturities of up to three years without violating its charter, fueling a massive rally by short-dated Spanish and Italian government debt on Tuesday, MarketWatch reported.

European stocks slipped ahead of the meeting after Moody's Investors Service warned that the European Union could lose its Aaa debt rating. Also affecting markets, the Swiss economy unexpectedly shrank in the second quarter, Reuters reports.

Asian markets declined Tuesday as well after Moody's downgraded its outlook on the European Union. It didn't help that China's official purchasing managers index fell below 50 for the first time since November 2011.

Stocks to watch
Campbell Soup (CPB) posted better-than-expected earnings, helped by higher soup sales. The company also gave an upbeat full-year outlook.

Smithfield Foods (SFD) reported 25% lower earnings of 40 cents per share, coming in below analyst expectations. The company cited growth in its packaged-meat business but poor performance of its fresh pork business dragged on profits, according to MarketWatch


Ford Motor (F) said U.S. sales in August rose by 13% from the same month a year ago, led by improved sales of the Focus and Fusion models. That was well above estimates of 7% to 10% sales growth. Ford sold 197,249 vehicles during the month, compared with 175,220 in August 2011. 


Chrysler reported its 29th consecutive month of year-on-year sales gains, with a 14% rise in August, above estimates.


General Motors (GM) said U.S. sales rose 10% in August as Buick, Chevrolet and Cadillac showed solid improvement. GM was expected to post 2% to 6% growth in vehicle sales. Total sales were 240,520 vehicles, up from 218,479 in August 2011. 


Shares of online video provider Netflix (NFLX) sank 10% after Amazon.com (AMZN) said it signed a multiyear licensing deal in the U.S. with Viacom's (VIA) Epix premium cable network to bring superhero blockbuster movies and thousands of other titles to Amazon's streaming video service. Just days ago, Netflix's exclusive deal with Epix expired.


Canada's biggest public drugmaker, Valeant Pharmaceuticals (VRX), will buy Medicis Pharamaceutical (MRX) for $2.6 billion in cash, its latest skin care deal in the U.S. this year. Medicis sells Dysport, an injection similar to Allergan's (AGN) Botox.

323Comments
Sep 4, 2012 10:30AM
avatar

And the dems keep on insisting that you are better than you were 4 years ago..................and for the 150,000 new government employees hired at an average salary of $70,000 plus all the perks..........THEY CERTAINTELY ARE BETTER OFF!!!

 

For the rest of us......... we have lost income, the dollar has lost 20% of it's value and the real unemployment rate is 15-16%

 

I agree with Clint Eastwood.............we have to let him go !!!!

Sep 4, 2012 10:12AM
avatar

Campbell Soup better-than-expected earnings, helped by higher soup sales.

 

 

 

THIS IS BECAUSE THAT'S ALL WE CAN AFFORD AFTER PAYING THE GAS PRICES THAT WE ARE PAYING NOW.

Sep 4, 2012 10:08AM
avatar
Hell, it ought to be on rock bottom from the way things are looking here. with gas and food prices, hell you can't walk into a grocery anymore and find much for under a $1. The dollar must be the new quarter. Get 1 bag of groceries and you spent $25 easily and don't get crap anymore. Just frickin ridiculous.


Sep 4, 2012 10:40AM
avatar
THE SUMMER OF RECOVERY
Well, well, well,  the summer is over, I must have missed the "summer of recovery" during these last 4 years?
You know, those 500,000 jobs per MONTH,  that were suddenly going to appear during this "summer of recovery"
Ring any bells, commies?
4 summers and ZERO recoveries !
LESS jobs today than the day Dear Leader took office !
LESS
Yes, how interesting , NOW,  he needs 4 more summers to do the job, BUT he didn't say that back in 2008, did he?
Instead he PROMISED by the END of his "first" term (Puke) to
a) cut the deficit in half !
b) unemployment to the 5-6% level !
What did we get?
hype
lies
corruption
tripled the deficit
44 months in a row of + 8% unemployment !

Well, he did give millions of illegal's amnesty
Free condoms
AREN'T WE LUCKY ?

avatar

The market is collapsing even with the promise of free monies from Bernanke and the European and Japanese central bankers.

 

Yep the end is upon us folks.

 

Sep 4, 2012 9:59AM
avatar

interesting article this weekend in the LA Times about how the hispanic illegal's are actually "republican" in nature but voting democrat to help all their non-voting friends. 

 

the net result is BOTH parties want these illegal anchor baby votes.  the numbers are certainly enough to swing the swing states. 

 

wonderful! 

 

more concern over illegal's than anyone who is here as a regular citizen

Sep 4, 2012 11:05AM
avatar
IT'S TIME TO STOP HOPING AND START DOING IT ON YOUR OWN!!!!
Sep 4, 2012 10:30AM
avatar
Maine's former governor, Angus King is running for Senate. He is an INDEPENDENT and was well revered by many who remember him as governor.

Wouldn't it be interesting if we could get more Independents into Congress, rather that this partisan bullcrap that we've been dealing with for the past 4 years?

Sep 4, 2012 10:15AM
avatar
We are all waiting and getting 10 cans at a time when they are 10 for $10.00.
Ramen noodles too!

Looks like we'll test 13K again this week.
Sep 4, 2012 11:01AM
avatar
"I would be looking for more specific action on QE3 by the end of the month...Smart money seems to be betting on it....IMO.  And so am I."

Looking to the Fed to try and save the day.  This is what we have become.  A bunch of shameless addicts.

SO SAD.
Sep 4, 2012 10:02AM
avatar
14.2 million new cars sold per year is a long way from the 16.5 million we were at a few years.  These numbers always seemed really high.  But I guess gov at all levels is a huge buyer of new cars, along with big rental-car companies.  Wonder how many new cars Hertz or Enterprise buy every year? - gotta be a bunch.  Don't see many local construction companies or plumbers/electricians/HVAC companies buying new trucks or vans anymore.  Also used to see a lot more big company cars on the road - Geek Squad was everywhere there for a while in those VW Beetles with the ugly color scheme.  Also used to see lots of insurance adjusters running around in company cars emblazoned with their company logo - not so much anymore.  One of our local pizza places has 3 locations and they used to get a few new Chevy Cavaliers every couple of years with their logo on them.  Those are all gone now and the delivery drivers just use their own cars - kinda sad.  Auto parts companies like Napa and Autozone used to buy new delivery trucks every couple of years, but the latest ones I've seen are 10+ years old.
Sep 4, 2012 10:55AM
avatar
VL

You want "real" talk
uh  like :
Transparency?
Hope & change
Change you can believe in ?
Cut the deficit in HALF?
No PORK in my bills ?
Seriously?
THAT's what YOU voted for in 08.
RING ANY BELLS, here?
Do tell , what WAS /IS Obuma's "plan" ,  I must have forgot?
LOL
He couldn't even PASS A BUDGET IN 4 YEARS !!
Are you for real?

Sep 4, 2012 10:48AM
avatar
MSN - " Stocks remained lower Tuesday after U.S. manufacturing data declined in August to its lowest level since July 2009. Also in focus are the European Central Bank meeting later this week and U.S. employment numbers"

There goes the better off than 4 years ago argument...
Sep 4, 2012 10:53AM
avatar
What's not to like about Ron Paul.

No FED.

No B.S. wars.

No foreign aid...

...
...
Sep 4, 2012 10:05AM
avatar

no doubt people are learning to get more miles out of their existing cars. 

 

also, note restaurants aren't really back to their old crowds yet.....

 

>>>>>>14.2 million new cars sold per year is a long way from the 16.5 million we were at a few years.  These numbers always seemed really high.  But I guess gov at all levels is a huge buyer of new cars, along with big rental-car companies.  Wonder how many new cars Hertz or Enterprise buy every year? - gotta be a bunch. <<<<<<

Sep 4, 2012 10:37AM
avatar
We expected manufacturing to fall ... why the surprise??? 
Sep 4, 2012 11:36AM
avatar
""It's funny how you say the President doesn't want to take any of the blame."" come on"";;;;;;he takes the credit for killing bin laden and every thing else but when they ask him about the jobs he said it was there when he got there.  GIVE ME A BRAKE  he said HE would get this fixed in 4 year,s , WELL  what happen, im democrat and i know better then that, im voting republic this time . i cant take 4 more years of b.s
Sep 4, 2012 11:40AM
avatar

Tubleweed_ I don't believe, i should be taxed to pay for 25 million illegal aliens healthcare, food stamps, 42 in tv's and cell phones. I don't believe I should be paying to house the 60 percent of illegal aiens/invaders that occupy the US prison system.

Meanwhile, Grandma whitey is getting her medicaid benefits cut.

Nature has it's way of taking care of the weak-----go get another job and doante that money---I don't want to pay anymore. Obama is going to be able to write the sequel to "tales of my father",soon. It will be called tail between my leg.

Sep 4, 2012 10:25AM
avatar
Today will be a down day because of a manufacturing report. I guess we should have seen the writing on the wall like Nebuchadnezzar.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

105
105 rated 1
271
271 rated 2
420
420 rated 3
633
633 rated 4
492
492 rated 5
532
532 rated 6
725
725 rated 7
515
515 rated 8
343
343 rated 9
140
140 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.