Closing Update: Stocks Finish Lower, Dragged Under By More Worries Fed Stimulus Will Soon End

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Stocks fell for a second day after comments from a pair of Federal Reserve officials indicated the central bank may begin to ease its massive bond-buying program as soon as next month. A steeper-than-expected decline in the U.S. trade gap convinced many traders the Fed will start tapering its stimulus efforts. All 10 sectors in the S&P 500 ended lower, with the biggest declines among industrial and materials stocks. Shares also were pressured by weak earnings results from several retailers, although the sector managed to pare a portion of its earlier losses by the end of the day.

In an interview with Market News International, Atlanta Fed President Dennis Lockhart said the Fed could begin trimming the size of the stimulus program as soon as September although he added the central bank may wait longer if the expected economic growth in the year's second half fails to materialize.

Later in the day, Chicago Fed President Charles Evans echoed Lockhart's comments, also saying the Fed is likely to slow its massive bond-buying stimulus program later this year, possibly as soon as its September Federal Open Market Committee meeting, depending on the economic data.

The Commerce Department today reported the U.S. trade gap fell 22.4% to $34.2 billion during June, the smallest deficit in nearly four years. Economists polled by Thomson Reuters had expected the trade gap to narrow only to $43.5 billion.

Commodities are lower. Crude oil for September delivery settled $1.26 lower at $105.30 per barrel while September natural gas was unchanged at $3.32 per 1 million BTU. December gold fell $19.50 to $1282.40 per ounce while September silver was down 20 cents to $19.52 per ounce. September copper was unchanged at $3.17 per pound.

Here's where the U.S. markets stood at the end-of-day

Dow Jones Industrials down 57.85 (-0.60%) to 9,613.75

S&P 500 down 9.77 (-0.57%) to 1,697.37

Nasdaq down 27.18 (-0.74%) to 3,665.77

GLOBAL SENTIMENT

Hang Seng Index down 1.34%

Shanghai Composite Index up 0.49%

FTSE 100 down 0.23%

UPSIDE MOVERS

(+) CLRX, Medical data-analytics firm apparently benefiting from a spate of recent media attention, including reports this week by NBC News and Forbes magazine featuring the company's tools now being used in cancer research and drug development.

(+) DYNT, Rallies for a second day after introducing four new electrotherapy and ultrasound therapy products. Gains also supported by the stock's small float, with only 1.66 million of its 2.52 million shares overall normally free to trade.

(+) ININ, Blows its former 52-high after posting Q2 earnings of $0.14 per share, topping analyst projections by $0.12 per share. Revenue grows near 39% year over year to $76.2 million, also beating the analyst consensus by around $6.4 million.

DOWNSIDE MOVERS

(-) TA, Q2 EPS of $0.52 trails analyst consensus by $0.48 per share. Sales OF $2.02 billion miss estimates by $10 million. for $2.12 billion.

(-) MDR, Reports a Q2 loss of $0.63, down from year ago income of $0.22 per share. Revenue was $647.3 million, down from $889 million last year. Analysts, on average, were looking for the oilfield services firm to produce a $0.03 per share profit on $757.87 million in revenue.

(-) AEO, Halves FY13 earnings forecast from its prior guidance, now expecting $0.10 per share because of weaker-than-expected sales and reduced margins. Total Q2 revenues slide 2% from year-ago quarter.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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