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
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
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 (
) 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 (
) 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 (
) 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
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 SECTOR INDICES
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
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(-) TFM, (-2.4%) Prices Secondary Offering
(-) AMD, (-0.5%) Launches Next Generation Graphics Card