Mid-Day Update: Stocks Edging Just Lower as Gains for Healthcare, Tech Stocks Offset by Declines for Energy, Consumer Firms

By MidnightTrader.com Staff,

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Stocks are little changed at mid-day after a pair of new economic reports - retail sales and producer prices - had traders fretting about a slowing U.S. economy. The European debt crisis also continues to weigh on global markets ahead of Greek parliamentary elections this weekend. Industry sectors in the S&P 500 are roughly split equally between winners and losers, with the best gains seen among healthcare and technology stocks while shares of energy and consumer discretionary companies are posting the biggest losses. Commodities are moderately higher.

U.S. retail sales fell during May for the second month in a row, sliding 0.2% on a seasonally adjusted basis, although the dip was slightly less than the 0.3% decline most experts were expecting. Excluding gasoline purchases, retail spending actually rose last month by 0.1% with strong demand at auto dealers and online retailers helping boost overall spending, according to the Commerce Department.

The recent fall in energy prices also contributed to a 1.0% drop in the U.S. producer price index last month, its largest one-month decline in nearly three years, the Labor Department said.

Analysts surveyed by MarketWatch had predicted a fall of 0.9% for the month. Core producer prices, excluding volatile food and energy, rose 0.2% - matching analysts' expectations. It was the second in a row the headline PPI rate fell, retreating 0.2% in April.

Several Wall Street firms cut their estimates for Q2 U.S. growth following today's retail sales and producer price reports. Bank of America/Merrill Lynch ( BAC ) lowered its target rate for growth in gross domestic product for the current quarter to 1.9% from a prior 2.4% forecast. RDQ Economics, CIBC World Markets and Macroeconomic Advisers also trimmed their respective growth forecasts, citing weaker retail sales in May and April, a bigger trade deficit and slower growth in business inventories as factors.

The U.S. grew at a 1.9% rate during Q1.

Separately, a new poll published on Wednesday by Reuters showed economists had over the past month trimmed their expectations for growth and hiring. Economists now expect the economy to gain only 147,000 jobs a month, on average, between now and October - a pace likely too slow to do much to lower the nation's 8.2% unemployment rate ahead of the presidential election.

In company news, shares of JPMorgan Chase & Co ( JPM ) are up about 3% today - helping support a small rally in financial stocks - as the bank's chief executive was appearing before a U.S. Senate committee to explain the company's recent trading losses. Jamie Dimon's remarks before the Senate Banking Committee did not veer significantly from his prepared testimony released last night, although he said the senior executives responsible for JPM's recent $2-billion trading loss will see their pay reduced through claw-backs.

Also today, shares of healthcare giant Johnson & Johnson ( JNJ ) are ahead about 1% after a trio of investment banks today upgraded the stock after JNJ received regulatory approval for its $20-billion acquistion of Synthes. J.P. Morgan raised the stock to Overweight from Neutral with a $74 price target. Raymond James boosted its rating to Outperform from Market perform while Jefferies bumped its rating to Buy from Hold. Both Jefferies and Raymond James set a $72 price target. JNJ said it expects the Synthes acquisition will be immediately accretive to earnings.

Crude oil for July delivery is up 39 cents at $83.71 a barrel. July natural gas is down 2 cents at $2.21 per 1 million BTU. August gold is up $8.60 to $1,622.40 an ounce while July silver is up a penny at $28.96 an ounce. July copper is flat at $3.338.

Among energy ETFs, the US Oil Fund is down 0.65% to $31.21 and the US Natural Gas Fund is down 0.13% to $15.35. Among precious-metal funds, the Market Vectors Gold Miners ETF is up 0.26% to $46.88 and the SPDR Gold Shares ETF is up 0.19% to $156.75. The iShares Silver Trust is down 0.40% to $28.01.

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

NYSE Composite Index down 9.12 (-0.12%) to 7,548.7012

Dow Jones Industrial Average down 28.72 (-0.23%) to 12,545.08

S&P 500 down 3.10 (-0.23%) to 1,321.07

Nasdaq Composite Index down 5.05 (-0.18%) to 2,838.02


Nikkei 225 Index up 0.60%

Hang Seng Index up 0.82%

Shanghai China Composite Index up 1.27%

FTSE 100 Index up 0.18%


NYSE Energy Sector Index down 0.23% to 11,391.83

NYSE Financial Sector Index up 0.12% to 4,277.71

NYSE Healthcare Sector Index up 0.25% to 7,165.14


(+) DELL, (+3.8%) Announces First Ever Dividend

(+) CELG, (+1.6%) Announces Additional $2.5 Billion Share Repurchase Program


(-) AONE, (-16.5%) Launches New Battery Technology

(-) NLSN, (-1.4%) Lowers Growth View

(-) TFM, (-2.4%) Prices Secondary Offering

(-) AMD, (-0.5%) Launches Next Generation Graphics Card

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

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

This article appears in: Investing Commodities
Referenced Stocks: BAC , JNJ , JPM

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