Stocks are sliding sharply in mid-day trading, with all three
major indexes testing lows and down more than 3%, as global markets
give a thumbs down to the Federal Reserve Bank's latest move to
boost the sagging U.S. economy and worry over Europe's debt crisis.
Still, the index of leading economic indicators was one of several
positive economic indicators.
Investors' downbeat mood stems from "bank runs in Europe" and
rumors that some European banks are looking in the Middle East for
capital, MarketWatch reported, citing chief investment officer at
Fort Pitt Capital, Charlie Smith.
The Fed said after a two-day meeting Wednesday that it would buy
long-term Treasuries and sell their short-term counterparts in a
$400 billion effort to revive borrowing and spending. The plan,
called Operation Twist in a nod to a similar bank move in the
1960s, is meant to drive down longer-term interest rates. Wall
Street economists were mixed in their assessment of the plan's
likely effectiveness and few had glowing reviews. Even Fed members
themselves were divided in their vote for the plan to "twist" the
In economic data, the Conference Board said that the U.S.
economy could exhibit weak growth through the remainder of the year
as it reported its index of leading economic indicators. The index
grew 0.3% last month, compared with a 0.1% gain that was expected,
according to a MarketWatch poll. The July figure was revised upward
to 0.6% from $0.5%.
Elsewhere, weekly jobless claims fell by 9,000 to 423,000, the
Labor Department reported. Economists had expected jobless claims
to decline to $424,000.
Also, HSBC's preliminary China Manufacturing Purchasing
Managers' index, or "flash" PMI, fell to a two-month low in
September. The headline preliminary PMI for the month was 49.4,
down from 49.9 in August. Gold is down $67 at $1,741 per ounce and
crude down 5.83% at $80.91 per barrel.
In company news:
Shares of Warner Chilcott plc (
) are higher after the company said the U.S. District Court for the
District of New Jersey granted its motion for a preliminary
injunction against Mylan Inc. (
) and its affiliate Mylan Pharmaceuticals Inc.
Shares of JPMorgan Chase (
) are down after Bloomberg reported the bank sued mutual fund firm
American Century, saying it was shortchanged in a $848 million
optioned share sale.
Shares of Logitech (
) are down after the company said late Wednesday it expects FY
revenue of approximately $2.4 billion, down from prior guidance of
approximately $2.5 billion. It expects operating income of about
$90 million for the current fiscal year, compared to a previous
target to meet or beat last year's level of $143 million.
Shares of Scholastic (
) are higher as the company said Q1 sales were $318 million, and
it's net loss per share from continuing operations was $0.81. The
Thomson Reuters mean was for $302.20 million in sales and a loss of
$1.04 per share, less items.
The U.S. Food and Drug Administration has reportedly said it
will review safety data on Sanofi's (SNY) heart-rhythm drug Multaq,
according to The Wall Street Journal.
Discover Financial (DFS) shares are higher as the company said
Q3 net sales were $1.789 billion, up from a year ago. Diluted EPS
were $1.18, also up from $0.47 a year ago. The Street had expected
EPS of $0.93 on sales of $1.77 billion.
Red Hat (RHT) shares are bucking the broader market trend and
staying in positive territory. yesterday, the company reported Q2
revenue of $281 mln, better than the analyst consensus of $271 mln
on Thomson Reuters. EPS was $0.29, vs. expectations of $0.25 per
Commodities are down. December gold contracts are down 3.94% to
$1,737 an ounce while November crude oil contacts are up 6.2% to
$80.59 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 4.8% to
$31.34 and the United States Natural Gas fund (UNG) is down 0.53%,
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 2.34%
to $169.52. Market Vectors Gold Miners (GDX) is down 6.58% to
$60.05. iShares Silver Trust (SLV) is down 6.92% to $35.92.
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