Stocks are in retreat, with all three major indexes down 1% or
more in a stunning reversal after a strong move higher out of the
gate in step with global gains following a debt deal in Washington.
A larger-than-expected drop in July manufacturing activity
torpedoed investor enthusiasm, causing more than a 200 point drop
in the Dow Jones Industrial Average between the opening bell and
Stocks turned lower after the July Institute of Supply
Management's index fell 4.4 points to 50.9, below the
Marketwatch.com mean estimate by economists of 54.3. New orders
index fell into contractionary territory, and indexes for prices
and employment in particular saw big drops.
In a separate report, a 0.2% gain in outlays for U.S.
construction projects in June, failed to offset the surprisingly
large July ISM index decline.
President Barack Obama and congressional leaders announced a
debt-ceiling extension and spending-cut package agreement Sunday
night. Both chambers must now vote on the measure. Mixed analyst
notes are hitting this morning over whether the U.S. remains at
risk for a credit downgrade, with some saying spending cuts may not
go far enough.
The still-unreleased legislation would slice more than $2
trillion from federal spending over a decade and permit the
nation's $14.3 trillion borrowing cap to rise by up to $2.4
trillion, enough to keep the government afloat through the 2012
In company news:
Shares of General Electric (
) are down after Bloomberg reported the company is set to sell its
SeaCo venture for $1.05 Billion. General Electric and a partner
agreed to sell shipping-container lessor GE SeaCo for $1.05 billion
to China-based HNA Group Co. and Bravia Capital, the company
Shares of Merck & Co. (
) are down while Reuters reports that it filed for approval of the
cancer drug Ridaforolimus, which it developed alongside Ariad
), with the European Medicines Agency. Merck is expected to submit
a new drug application in the U.S. shortly, the report said.
) said that the U.S. Food and Drug Administration recently approved
its Mallinckrodt business for morphine sulfate oral solution,
indicated for the relief of moderate to severe acute and chronic
pain in opioid-tolerant patients.
) firms after Barron's says shares may rise as much as 25% if the
company continues revenue growth through investments in its
distribution system and cloud-computing business. Shares hit a
52-week high of $227.45 earlier
Shares of Apple (AAPL) are higher after All Things Digital said
the computer maker will launch the next generation of the popular
iPhone smartphone - the iPhone 5 - in October rather than
September. The report cited sources with knowledge of the
ADRs of HSBC Holdings (HBC) are higher after the European bank
said it is slashing around 30,000 jobs to cut costs and revamp its
business, as it follows through on a May plan to withdraw from some
countries and refocus its operations on high-growth markets,
MarketWatch and other news outlets report.
Talbots Inc. (TLB) is up sharply after an investor group led by
Sycamore Partners reported a 9.9% stake in the retailer, according
to news reports this morning. The investors reportedly said that
the stock is "undervalued and is an attractive investment." The
group plans to engage in discussions with Talbots' management, the
board, other shareholders and relevant parties.
In the latest earnings news:
--Loews Corp. (L) reports Q2 EPS of $0.62 compared to $0.87 a
year earlier and below the Street view for $0.74. Total revenues
rose to $3.54 billion from $3.49 billion.
--Allstate Corp. (ALL) swung to a Q2 loss of $1.19 per share
compared to income of $0.27 a year ago. Wall Street expected a loss
at $1.46. A rash of tornadoes accounted for a jump in catastrophe
losses, to $2.34 billion against $96.8 billion in the year-ago
--Shares of Humana (HUM) reports Q2 adjusted EPS of $2.50,
topping the year-ago period and the Thomson Reuters mean analyst
estimate for $2.05. Revenue rose 8% to $9.28 billion from $8.59
billion a year ago.
Commodities are mixed. December gold contracts are up 0.08% to
$1,632 an ounce while September crude oil contacts are down 1.58%
to $94.21 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 2.32%
to $36.57 and the United States Natural Gas fund (UNG) is up 0.57%,
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.3% at
$158.76. Market Vectors Gold Miners (GDX) is up 1.28% to $57.62.
iShares Silver Trust (SLV) is up 0.23% to $38.95