Mid-Day Update: Stocks Treading Water Minutes Ahead of Fed Decision; Financial Share Edge Higher

By MidnightTrader.com Staff,

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U.S. stocks are little slightly lower ahead of a statement due out shortly from Federal Reserve policy-makers that traders hope will detail additional stimulus measures by the central bank. Shares have largely been drifting in a narrow range throughout the morning, with traders apparently unwilling to stake out positions before the Fed announcement. Most industry sectors in the S&P 500 are down in mid-day trade, with financial and technology stocks the lone gainers this afternoon. Commodities also are lower.

The two-day Federal Open Market Committee meeting concludes today with its statement at 12:30 p.m. ET. Fed Chairman Ben Bernanke later will conduct a 2:15 p.m. news conference.

The consensus among investors has the Fed extending its so-called "Operation Twist" -- buying longer-dated debt instruments with the proceeds of shorter-dated bonds in its portfolio as they expire -- in a bid to lower borrowing costs. While the chances of further quantitative easing seemed extremely likely a few months ago, signs of a slowdown in U.S. economic growth recently have fueled sentiment the Fed will act to prop up the economy.

The formation of a new government today in Greece following Sunday's parliamentary elections has had little impact on equities. Pro-austerity parties won a narrow majority and their leader announced an agreement earlier today on a new ruling coalition. The new government will not be official, however, until Greece's president approves the mandate, expected within the next few days.

In economic news, chief executives at U.S. companies are less likely to add new workers and fewer are expecting sales to rise in upcoming quarters, according to a survey by the Business Roundtable released on Wednesday. Overall, the group's CEO Economic Outlook Index fell to 89.1 in Q2, down from a 96.9 reading in Q1 although the measure of executive optimism remains well above the 50 mark separating growth from decline.

In corporate news, JPMorgan Chase ( JPM ) shares are up about 2.5% today amid reports the money center bank has sold off most of the losing corporate-credit position that cost it billions of dollars, people familiar with the matter were telling CNBC.

JPM has divested between 65% to 70% of its holdings in the credit derivative index that tracks a cross-section of selected corporate debt instruments. The position played a major role in what the bank has estimated to be at least $2 billion in losses, a figure bank chief Jamie Dimon first acknowledged publicly on May 10.

Volume in Series 9 of the Markit CDX North America Investment Grade Index has surged the past two days, with a record $31 billion of contracts expiring in December 2017 traded yesterday, according to two Credit Suisse traders in an e-mail to market participants. That compares with an average of between $2 billion and $3 billion, the traders said.

Elsewhere, the S&P Consumer Staples Index is down about 0.7%, the steepest decline among industry sectors in the S&P 500, after Procter & Gamble Co. ( PG ) cut its Q4 profit and sales forecasts for a second time and outlined initial estimates for fiscal 2013.

Citing weaker-than-expected growth in developed markets, P&G said it will likely earn an adjusted $0.75 to $0.79 a share during the current quarter ending later this month, down from its prior forecast of $0.79 to $0.85 a share and trailing the FactSet Research consensus of analysts by at least $0.03. PG also pared its sales outlook for the current period, saying net sales will likely fall 1% to 2% below year-ago levels

Crude oil prices are down slightly more than 1% today, with the August NYMEX contract down 97 cents at $83.38 a barrel. Crude had been little changed to slightly higher earlier this morning ahead of the weekly U.S. Energy Information Agency inventory report, which saw a 2.9 million barrel build to 387.3 million during the week ended June 15 fueled by a second week of large import activity.

Other commodities are mostly lower. July natural gas is flat at $2.546 per 1 million BTU. August gold is off $16.10, or nearly 1%, at $1,607.10 an ounce while July silver is up 2 cents at $28.39 an ounce. July copper is down 3 cents at $3.4025.

Among energy ETFs, the US Oil Fund is down 2.62% to $30.85 and the US Natural Gas Fund is off 1.47% at $17.41. Among precious-metal funds, the Market Vectors Gold Miners ETF is down 1.51% to $46.96 and the SPDR Gold Shares ETF is 0.83% lower at $155.85. The iShares Silver Trust is down 0.14% to $27.60.

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

NYSE Composite Index is down 1.68 (-0.02%) to 7,764.5811

Dow Jones Industrial Average is down 25.09 (-0.20%) to 12,812.24

S&P 500 is down 3.33 (-0.25%) to 1,354.65

Nasdaq Composite Index is down 2.11 (-0.07%) to 2,927.65


Nikkei 225 Index up 1.11%

Hang Seng Index up 0.53%

Shanghai China Composite Index down 0.34%

FTSE 100 Index up 0.64%


NYSE Energy Sector Index unchanged at 11,806.40

NYSE Financial Sector Index up 0.40% at 4,436.88

NYSE Healthcare Sector Index is down 0.09% at 7,355.29


(+) AMAT, (+3.0%) Taps Gary Dickerson as President

(+) GEVO, (+29.7%) Wins in Court

(+) GALE, (+6.3%) President to Provide Update at Convention


(-) APPY, (-38%) Prices 6.1 Mln Share Offering at $2.00 a piece

(-) FSII, (-18%) Beats by $0.04, Guides Q4 Lower

(-) CIM, (-5.2%) Declares Dividend

(-) ADBE, (-3.7%) Beats on Q2, Sets Q3 View Mostly Below Expectations

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: JPM , PG

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