Mid-Day Update: Markets Rise on Corporate Earnings, Bargain Hunting

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U.S. equity markets are up today, buoyed by strong domestic corporate earnings and some bargain buying after recent strong sell offs.

The market found little to inspire it in mixed economic reports.

Initial claims surged 36,000 to 386,000, down from a prior level of 350,000 and topping consensus estimates of 365,000 (range 360,000 to 375,000). But timing and seasonal adjustments must also be considered when looking at it. In fact, the four-week moving average actually declined, moving to 375,500 from 376,500. This metric matters because when jobless claims decrease, it suggests an improving labor market, and stronger labor markets mean greater household spending power and a stronger economy overall. In this case, the decrease in the four-week moving average is encouraging.

The Bloomberg Consumer Comfort Index, which provides a measure of consumer attitudes and has significant long-term correlations with several economic indicators, was not so inspired. The level remained steady from last week, at minus 37.5, as soft gasoline prices no longer offset the labor market. The Bloomberg Index of the State of the Economy actually fell to its lowest since February, at minus 72.8, which represents a strong decrease from the previous period's minus 71.7. But the measure of whether consumers think it is a good time to buy increased, moving to minus 41.5 from minus 42.4 the prior week.

Sales of existing homes, which is a good gauge for housing demand as well as economic momentum, declined sharply, down 5.4% in June to an annual rate of 4.37 million, marking the lowest level of the year. The previous level was 4.55 million and consensus estimates had put the figure at 4.65 million (range 4.60 million to 4.73 million).

The Philly Fed Report also came out today. It gives detailed information on a weekly basis about the manufacturing sector, how busy it is and where things are headed. Given the importance of the manufacturing sector to the economy as a whole, this report provides a strong look at market behavior. Today's report showed that general business conditions are declining sharply along with new orders, which points to a general downturn.

Natural gas in storage rose less than expected, increasing by 28 billion cubic feet (bcf) this week to 31,63 bcf. An injection of 30 bcf was predicted. This is important because the volume of natural gas in storage is one factor that helps determine prices for the commodity.

Crude oil was up to $91.88 per barrel. Natural gas was up to $2.97 per 1 million BTU. Gold was up $16.70 to $1,587.50 an ounce, while silver was up 0.24 to $27.34 an ounce. Copper was up 0.05 to $3.53 per pound.

Among energy ETFs, the United States Oil Fund is up 3% with the United States Natural Gas fund up nearly 1%. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up more than 1% while SPDR Gold Shares were up around 0.6%. The iShares Silver Trust was up aboutthe same.

Here's where the markets stand at mid-day:

US MARKETS

NYSE Composite Index up 19.98 (+0.26%) to 7,851.47

Dow Jones Industrial Index up 22.63 (+0.18%) to 12,931.33

S&P 500 up 3.72 (+0.27%) to 1,375.88

Nasdaq Composite Index up 21.85 (+0.74%) to 2,964.76 Â

GLOBAL SENTIMENT

FTSE 100 is up 22.79 (+0.40%) to 5,708.56

DAX is up 68.36 (+1.02%) to 6,752.78

CAC 40 is up 24.70 (+0.76%) to 3,260.10

Nikkei 225 up 68.81 (+0.79%) to 8,795.55

Hang Seng Index up 319.17 (+1.66%) to 19,559.05

Shanghai China Composite Index up 15.74 (+0.73%) to 2,184.84

NYSE SECTOR INDICES

NYSE Energy Sector Index up 14.06 (+0.12%) to 12,116.90

NYSE Financial Sector Index down 4.69 (-0.11%) to 4,440.75

NYSE Healthcare Sector Index down 4.25 (-0.06%) to 7,605.44

UPSIDE MOVERS

PSDV (+34.3%) Announced that the U.S. FDA has cleared its Investigational New Drug ( IND ) application to treat posterior uveitis (inflammation of the eye) with PSDV's injectable sustained-release micro-insert. PSDV is now permitted to commence two Phase 3 trials to treat patients with posterior uveitis.

EDU (+28%) Company responded to allegations raised in a report dated July 18, 2012 issued by Muddy Waters. New Oriental stated that it believes the Muddy Waters report contains numerous errors of facts, misleading speculations and malicious interpretations of events.

ROVI (+14% from near year lows) Reached a licensing deal with Panasonic ( PC ). The license covers the use of Rovi's Divx Plus Streaming technology in Panasonic's HDTV and Blu-ray processors. Divx Plus aims to deliver a Blu-ray-like feature set to online streaming.

DOWNSIDE MOVERS

IRG (-21.7%, hit year lows) Bronstein, Gewirtz & Grossman, LLC announced it is investigating potential claims on behalf of IRG shareholders, alleging that certain statements issued by IRG regarding the company's business, operations and financial condition were false and misleading.

DCIX (-13.6%) Priced 8.1 million shares at $6.25 each in a public offering. The offering is expected to close on July 24.

MITK (-11.3%) Filed a motion to amend its complaint to include the claims of defamation and violation of the Lanham Act for unfair business practices in its lawsuit against United Services Automobile Association (USAA) in the U.S. District Court for the District of Delaware.



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.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: IND , PC

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