Midday Update: Record High Factory Orders Re-Kindles Worries of Higher Interest Rates, Pressuring Equities

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Stocks were slightly lower Tuesday, trading in a narrow range after better-than-expected factory orders and strength in the non-manufacturing piece of the U.S. economy rekindled fears that the Federal Reserve could soon adopt a more restrictive monetary policy. The economic data overshadowed upbeat earnings from Coach ( COH ) and CVS Caremark ( CVS ), as well as a stronger dollar and easing geo-political pressures.

Tuesday's economic calendar kicked off with a small downward revision to the July PMI services index to a final 60.8 reading, missing the market consensus looking for the index to remain unchanged at 61.0.

After the open, the Commerce Department reported a 1.1% gain in June factory orders to a record high $503.2 billion, beating estimates for a 0.6% gain, and more than reversing a revised 0.6% decline in May.


Finally, the Institute for Supply Management index for the services industry jumped to a 58.7 reading, exceeding expectations for a small rise to 56.5 in July from the 56.0 score last month.

European equities managed to close higher despite the downbeat tone on Wall Street with strong corporate earnings fueling the majority of Tuesday's gains. Although the EU services PMI declined from the month prior, Spain and Germany and the UK all reported an improving non-manufacturing sector, while EU retail sales rose significantly from year ago levels.

Crude oil was down $0.69 to $97.57 per barrel. Natural gas was up $0.06 $3.90 per 1 million BTU. Gold was down $3.40 to $1,285.60 an ounce, while silver was down $0.41 to $19.82 an ounce. Copper was down $0.04 to $3.21 per pound.

Among energy ETFs, the United States Oil Fund was down 0.99% to $36.12 with the United States Natural Gas Fund was up 1.13% to $21.43. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 1.11% to 25.67 while SPDR Gold Shares were down 0.32% to $123.59. The iShares Silver Trust was down 1.98% to $19.02.

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

NYSE Composite Index down 57.63 (-0.54%) to 10,709.05

Dow Jones Industrial Average down 88.88 (-0.54%) to 16,480.40

S&P 500 down 11.78 (-0.61%) to 1,927.21

Nasdaq Composite Index down 24.40 (-0.56%) to 4,359.49

GLOBAL SENTIMENT

Nikkei 225 Index -1.00%

Hang Seng Index +0.20%

Shanghai China Composite Index down 0.15%

FTSE 100 Index up 0.07%

CAC 40 up 0.37%

DAX up 0.39%

NYSE SECTOR INDICES

NYSE Energy Sector Index up 0.78%

NYSE Financial Sector Index down 0.67%

NYSE Healthcare Sector Index down 0.34%

UPSIDE MOVERS

(+) MWA (+14.72%) Upgraded by Brean to Buy from Hold.

(+) ISR (+9.01%) Study shows 'superior' results with its Cesium-131 seeds.

(+) CHGG (+16.13%) Reported Q2 earnings of $0.00 per share on $64.5 revenue.

(+) GIGA (+19.81%) Net sales were up 50% from Q1 2014.

DOWNSIDE MOVERS

(-) AMSC (-11.01%) Missed Q1 revenue estimates, issues disappointing guidance.

(-) OXFD (-9.62%) Reports wider than expected Q2 loss, guides Q3 revenue below estimates.

(-) ENZY (-36.62%) Misses earnings and revenue estimates, EPS guidance below street consensus.



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: COH , CVS

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