US close: Stocks slide after worse-than-forecast data
US stocks declined as data revealed weak wage inflation and an unexpected downward revision to a consumer confidence report.
Dow Jones I.A.
38,943.26
04:30 15/10/20
Nasdaq 100
18,098.96
06:10 08/05/24
S&P 500
5,183.71
17:18 08/05/24
The US 10-year Treasury yield fell to a three-week low, as subdued wage inflation put doubts on the likelihood of an interest-rate increase by the Federal Reserve in September. The employment-cost index rose 0.2%, the smallest gain in three decades and below the forecast for a 0.6% gain.
"Given that policymakers at the Fed reiterated last week that 'lift-off' will depend on the incoming data, particularly from the labour market, the market clearly believes that these latest figures cast doubt on both a September rate hike and the pace of monetary tightening thereafter,” according to Capital Economics analysts.
In other downbeat news for the US, the University of Michigan’s index on consumer confidence was revised lower to 93.1 in July from an earlier estimate 93.3, according to a final reading. Analysts had expected a reading of 94.
However, Barclays Research analysts remained upbeat, blaming negative news out of Greece and China for the hit to confidence. “On balance, the final July data from the Michigan survey suggest that consumer sentiment remains broadly stable; we look ahead to next month’s survey readings and the July retail sales report for confirmation of a healthy and stable US consumer,” they said.
On the upside of economic data, the Chicago PMI rose to 54.7 in July from 49.4 a month earlier, moving above the 50 level that signals an expansion in manufacturing activity and beating expectations for a reading of 50.8.
Elsewhere, China’s stocks rallied near the end of the week but still closed lower as government measures intended to lift the market waned.
Greece remained a talking point as negotiations between the country and the European Union and International Monetary Fund over a third bailout began. The IMF reiterated that it would not disburse any Greek aid before it sees evidence of concrete reforms and a granting of debt relief.
The dollar was in retreat against the main currencies, losing against the pound and the yen and the euro. Gold on the Comex was up while silver and copper dropped.
Oil prices fell, with West Texas Intermediate losing 3.6% to $46.79 a barrel, while Brent crude shed 3.09% to $51.71 a barrel.
Earnings
In company news, oil giant Exxon Oil edged lower after reporting its second quarter profit were halved by the slump in oil prices, while sector peer Chevron plunged after posting disappointing second quarter results ahead of the opening bell. The group posted a sharp decline in revenue, while its upstream operation swung to a loss.
Food retailer Whole Foods regained ground after an earlier downturn as analysts at Imperial Capital cut to the price target on the stock from $65 to $53.
Internet network LinkedIn tumbled after the group posted a $67.7m net loss in the second quarter, compared with $1m last year.
“The net loss of $67.7m is much larger than last year’s $1m, largely because of costs associated with its recent acquisition of Lynda.com,” said Jasper Lawler, analysts at CMC Markets.
“The bigger worry is a trend of high expenditure not being matched by high enough growth to justify the very high valuation of social media stocks.”
S&P 500 - Risers
Expedia Inc. (EXPE) $121.44 +12.85%
Coca-Cola Enterprises Inc. (CCE) $51.12 +12.50%
Western Union Co. (WU) $20.25 +6.47%
Ameren Corp. (AEE) $41.09 +3.35%
FirstEnergy Corp. (FE) $33.96 +3.03%
Tyco International Plc (TYC) $38.02 +2.95%
PerkinElmer Inc. (PKI) $52.93 +2.94%
Amgen Inc. (AMGN) $176.59 +2.85%
Avon Products Inc. (AVP) $5.66 +2.81%
Carnival Corp. (CCL) $53.30 +2.74%
S&P 500 - Fallers
Fluor Corp. (FLR) $46.74 -8.17%
Micron Technology Inc. (MU) $18.57 -6.68%
Murphy Oil Corp. (MUR) $32.79 -6.23%
Denbury Resources Inc. (DNR) $3.93 -5.76%
Chevron Corp. (CVX) $88.29 -5.10%
Transocean Ltd. (RIG) $13.26 -4.95%
Leggett & Platt Inc. (LEG) $47.76 -4.90%
Exxon Mobil Corp. (XOM) $79.21 -4.58%
Peabody Energy Corp. (BTU) $1.21 -3.97%
Marathon Oil Corp. (MRO) $21.01 -3.89%
Dow Jones I.A - Risers
Coca-Cola Co. (KO) $41.11 +1.36%
Pfizer Inc. (PFE) $36.09 +1.01%
Boeing Co. (BA) $144.23 +0.85%
Merck & Co. Inc. (MRK) $58.99 +0.80%
Unitedhealth Group Inc. (UNH) $121.43 +0.72%
McDonald's Corp. (MCD) $99.86 +0.70%
International Business Machines Corp. (IBM) $161.99 +0.64%
Home Depot Inc. (HD) $117.03 +0.49%
Cisco Systems Inc. (CSCO) $28.43 +0.46%
Johnson & Johnson (JNJ) $100.28 +0.44%
Dow Jones I.A - Fallers
Chevron Corp. (CVX) $88.29 -5.10%
Exxon Mobil Corp. (XOM) $79.21 -4.58%
Visa Inc. (V) $75.37 -1.32%
Goldman Sachs Group Inc. (GS) $205.07 -1.03%
Procter & Gamble Co. (PG) $76.74 -0.84%
Apple Inc. (AAPL) $121.46 -0.74%
JP Morgan Chase & Co. (JPM) $68.56 -0.70%
United Technologies Corp. (UTX) $100.32 -0.41%
Travelers Company Inc. (TRV) $106.13 -0.35%
Wal-Mart Stores Inc. (WMT) $71.99 -0.24%
Nasdaq 100 - Risers
Expedia Inc. (EXPE) $121.44 +12.85%
Amgen Inc. (AMGN) $176.59 +2.85%
Staples Inc. (SPLS) $14.71 +2.72%
Netflix Inc. (NFLX) $114.31 +2.47%
Discovery Communications Inc. Class A (DISCA) $33.02 +2.45%
Fastenal Co. (FAST) $41.86 +2.37%
Akamai Technologies Inc. (AKAM) $76.71 +2.33%
Sba Communications Corp. (SBAC) $120.77 +2.17%
KLA-Tencor Corp. (KLAC) $53.05 +1.90%
Priceline Group Inc (PCLN) $1,243.57 +1.76%
Nasdaq 100 - Fallers
Micron Technology Inc. (MU) $18.57 -6.68%
Yahoo! Inc. (YHOO) $36.67 -2.00%
Avago Technologies Ltd. (AVGO) $125.14 -1.97%
Broadcom Corp. (BRCM) $50.61 -1.44%
Seagate Technology Plc (STX) $50.60 -1.35%
NetApp Inc. (NTAP) $31.15 -1.33%
Facebook Inc. (FB) $94.01 -1.26%
Intuitive Surgical Inc. (ISRG) $533.17 -1.20%
Applied Materials Inc. (AMAT) $17.36 -1.20%
Maxim Integrated Products Inc. (MXIM) $34.03 -1.10%