US Indexes Drift Lower as Investor Disappointment With New Economic Data Sets In; Commodities Trade in Red


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Stocks have shed modest early gains and are now lower in mid-day trading, with blue chips leading the way, down 0.59%, after disappointing data hit pre-market and morning sessions, and investors awaited the latest government employment data, due Friday, to gauge the strength of the recovery.

The Labor Department said 422,000 people nationwide requested jobless benefits in the week ended May 28. The prior week's number was revised up to 428,000 from an original 424,000. Economists surveyed by MarketWatch had expected initial claims to decline to a seasonally adjusted 418,000 in the week ended May 28. The average of new claims over the past four weeks, considered a more accurate measure of employment trends, fell 14,000 to 425,500, the lowest level in more than a month.

Also, as home sales flag, the cost of a 30-year fixed mortgage fell to the lowest level of the year at 4.55%, down from 4.60% in the previous week, according to Freddie Mac, which tracks the market. The cost of a 15-year fixed mortgage also declined to 3.74% from 3.78%, also new lows for the year. The five-year adjustable-rate mortgage was flat at 3.41%, while the one-year adjustable-rate loan rose slightly to 3.13%.

Meanwhile, April factory orders fell 1.2% from a revised March figure of up 3.8%. Economists were looking for a 0.8% drop, according to Excluding transport, new orders slipped 0.2% in April. Shipments fell 0.2%, the first drop after seven straight monthly gains.

In company news:

Kellogg Company ( K ) today announced at the Sanford Bernstein Strategic Decisions Conference that it is reaffirming its FY 2011 guidance, with internal sales growth guidance of 4%. The company also reaffirmed internal operating profit guidance of flat to down 2% year-over-year, and said it's on track for a currency-neutral earnings per share growth in the low single-digit range.

ADRs of Novartis ( NVS ) are down after the company's Chief Executive Officer, Joe Jimenez, said he is willing to spend $3 billion on acquisitions of veterinary assets or consumer-health businesses to boost its presence in those markets, Bloomberg reported. Also, the company is also looking for acquisitions in the generic-drug, diagnostics and biotech market, the report said.

Nordstrom (JWN) today posted a 7.4% increase in same-store May sales versus a year ago. Preliminary total retail sales are at $796 mln, an increase of 13% compared to $705 mln last year. Year-to-date same store sales are up 6.7% compared to the prior-year month, while preliminary year-to-date retail sales increased 12.2% to $3.02 bln versus last year's $2.7 bln.

Shares of Qualcomm (QCOM) are higher after reports the chipmaker is working with Microsoft on its Windows 8 operating system. The company's Snapdragon smart mobile processors are said to be designed to power devices running the next version of the operating system.

Google (GOOG) is lower as investors continue to react to news of Gmail hacking. Google swung to losses in the after-hours session following the company's announcement that "hundreds" of Gmail accounts had been hijacked through malware or "phishing" scams, getting users to share passwords.

Shares of Bank of America ( BAC ) and Citigroup ( C ) are mixed after Moody's Investor Services said it may downgrade the two banks as the debt-rating service evaluates whether the government with cap its support of financial firms. The agency's current ratings for the bank were based on "uplift from Moody's systemic support assumptions that were increased during the financial crisis," according to Bloomberg.

Commodities are down. August gold contracts are down 1.1%, to $1,526 an ounce while July crude oil contacts are down 1.66% to $98.64 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 1.14% to $39.07 and the United States Natural Gas fund (UNG) is up 3.11%, to $12.12.

In precious metal ETFs, the SPDR Gold Trust ( GLD ) is down 0.74% at $148.80. Market Vectors Gold Miners (GDX) is down 1.12% to $56.43. iShares Silver Trust (SLV) is down 1.45% to $35.23.

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 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities
More Headlines for: BAC , C , GLD , K , NVS

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