Sharechat Logo

While you were sleeping Dow slips from record

Thursday 25th July 2013

Text too small?

Wall Street fell from a record high as disappointing earnings from companies including Caterpillar gave investors reasons to pause.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.39 percent from its record-high close yesterday, while the Standard & Poor's 500 Index slid 0.51 percent, and the Nasdaq Composite Index edged 0.08 percent lower.

Shares of Caterpillar dropped, last 2.8 percent weaker, after the company lowered its 2013 earnings forecast. Shares of AT&T also fell, last down 1.4 percent, amid disappointing results.

But it was not all bad news. Shares of Apple gained, last up 5.9 percent, as the company posted earnings -- while lower than a year ago -- surpassed forecasts.

Shares of Ford Motor rose, last up 2.6 percent, after the car maker lifted its full-year profit target.

Earnings are "so far not so bad," Jeff Meyerson, head of trading for Sunrise Securities in New York, told Reuters. However, "I don't see big blowout numbers to drive the market to the plus side and move it significantly higher."

The latest US economic data suggested strength. Single-family home sales jumped 8.3 percent to a seasonally adjusted annual rate of 497,000 units in June, the highest level in five years, according to the Commerce Department.

Separately, Markit's flash US Manufacturing Purchasing Managers Index increased to a four-month high of 53.2 in July, from 51.9 last month.

"The US manufacturing sector picked up momentum again in July, with output, order books and employment all growing," Chris Williamson, chief economist at Markit, said in a statement.

"The goods-producing sector acts as a bellwether of the wider economy, and the upturn in July therefore bodes well for the pace of GDP growth to have picked up again in the third quarter after a likely easing in the second quarter."

In Europe, the Stoxx 600 Index advanced 0.6 percent. The UK's FTSE 100 rose 0.4 percent, Germany's DAX added 0.8 percent, while France's CAC 40 climbed 1 percent.

Here too there were signs of promise. The Markit Eurozone PMI Composite Output Index rose to 50.4 in July, up from 48.7 in June, according to the flash estimate.

"The best PMI reading for one-and-a-half years provides encouraging evidence to suggest that the euro area could-at long last-pull out of its recession in the third quarter," Markit's Williamson said in a statement. "The revival is being led by a broad-based upturn in manufacturing, where growth surged to a two-year high. Increased goods production was reported in Germany, France and across the rest of the region as a whole."

Meanwhile US Treasuries fell and demand for today's US$35 billion auction of five-year debt was lacklustre. The debt's bid-to-cover ratio was 2.46, down from an average of 2.8 for the past 10 sales.

"It's a weak market having to absorb supply," John Briggs, a US government-bond strategist in Stamford, Connecticut, at Royal Bank of Scotland's RBS Securities unit, one of the 21 primary dealers required to bid at Treasury auctions, told Bloomberg News. "Our bias is toward higher yields, and I think we can probably still keep testing higher."

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report