Stocks have rebounded from a mid-morning swoon and are back in
positive territory at mid-day as trading volatility continues in
the face of new economic data and the evolving European debt
Treasury Secretary Timothy Geithner was the latest to weigh in
on the crisis, saying that European leaders know they need to act
more forcefully to solve sovereign debt issues in the eurozone. At
home, a mixed slate of economic data showed fuel costs offsetting
an increase in food prices.
In the latest economic data released this morning, prices of
U.S. goods at the wholesale level were unchanged in August as
another decline in fuel costs offset an increase in food. The more
closely followed core producer price index edged up 0.1% last month
to mark the ninth straight increase, but just below what economists
were expecting for August.
Also reported, U.S. retail and food services sales in August
reached $389.5 billion, with virtually no growth from the prior
month as consumers spent more at gas stations and grocery stores,
but less at motor vehicles and parts dealers, according to Commerce
Department data. Excluding the volatile auto segment, sales rose
0.1%. Economists surveyed by MarketWatch had expected an increase
of 0.3% for the overall number, as well as for the data excluding
The federal Energy Information Administration reported that
crude supplies fell 6.7 million barrels, or 1.9%, to 346.4 million
barrels compared with the week before. Inventories were 3.1% lower
than last year. Analysts were looking for inventories to fall by
2.9 million barrels, according to Platts survey.
Gasoline inventories, however, gained 1.9 million barrels, or
0.9%, to 210.8 million barrels, while analysts had expected a
400,000-barrel decline. Distillates, which include heating oil and
diesel fuel also rose by 1.7 million barrels; analysts were only
looking for a 1-million-barrel gain.
German Chancellor Angela Merkel reportedly sought to ease fears
over an imminent default for Greece. Reports note a conference call
between Merkel, French President Nicolas Sarkozy and Greek Prime
Minister George Papandreou.
In an interview on CNBC this morning, Treasury Secretary
Geithner said the chief concern for European politicians is to make
it clear that they will stand behind the financial system,
MarketWatch reported. Geithner also said that there is "no chance"
of a Lehman-style European default, the report said.
In company news:
ADRs of BP (
) are higher as traders react to a report on the Gulf of Mexico oil
spill. A federal inquiry into the Deepwater Horizon disaster notes
that blame for the incident is to be shared, and the lead cause of
the event was the cement, according to Dow Jones Newswires.
) was in charge of the cementing process, the report said.
Shares of IAC/InterActive Corp. (
) are higher as the company said its Match.com online dating unit
purchased a 20% stake in China-based online matchmaking service
Zhenai Inc. for an undisclosed sum.
Shares of Dollar Thrifty (
) are down after reports that Avis (
) is dropping its year-long bid to acquire the company in light of
current market conditions, leaving Hertz (HTZ) as the sole
Shares of Intel Corp. (INTC) are higher after the company
unveiled its first products coming from the acquisition of security
technology company McAfee, noted MarketWatch in a report. Intel
unveiled DeepSafe, which combines security features on Intel chips
with McAfee software for what is known as a middleware product
because it resides between system data and the user interface.
Capital One Financial (COF) and LML Payment Systems (LMLP)
shares are higher after they signed a settlement and license
agreement to end a patent infringement suit that LMLP filed against
COF in the U.S. District Court for the Eastern District of Texas.
The suit alleged that COF infringed LMLP's U.S. Patent No.
RE40,220, or patents for electronic check conversion transactions.
As part of the agreement, COF paid $2.9 million to LMLP.
Commodities are down. December gold contracts are down 0.25% to
$1,825 an ounce while October crude oil contacts are down 2.01% to
$88.39 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 1.49%
to $34.33 and the United States Natural Gas fund (UNG) is up 0.85%,
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.62%
to $177.44. Market Vectors Gold Miners (GDX) is down 1.63% to
$63.34. iShares Silver Trust (SLV) is down 0.55% to $39.65.