Mid-Day Update: Stocks Swinging from Black to Red and Back; Positive Jobs Data Offset by Weaker Durable-Goods Orders
Stocks are bouncing either side of even at mid-day as positive news for the U.S. labor market is offset by slightly disappointing growth in durable goods orders last month. Industry sectors in the S&P 500 are similarly split between gainers and laggards, with the best gains coming among consumer staples and utility stocks while industrial shares are trailing the field following the durable-goods report. Commodities are mostly higher today, snapping a two-day losing string.
Stocks began building on early gains this morning after new jobless claims fell by 2,000 last week to 370,000, according to the U.S. Labor Department. Claims from two weeks ago were revised up to 372,000 from 370,000. Experts were expecting claims would rise to a seasonally adjusted 373,000 in the week ended May 19. The average of new claims over the past four weeks, meanwhile, dropped by 5,500 to 370,000, the lowest level in six weeks. Continuing claims also decreased.
The Commerce Department reported Thursday that durable-goods orders edged up 0.2% in April, the second rise in three months, reaching a seasonally adjusted $215.5 billion after dropping 3.7% in March. Economists polled by MarketWatch had anticipated a slight fall of 0.4% in April, and March's orders were revised to show a 3.7% drop instead of a previously reported 4% decline.
The gain was led by a 2.1% rise for the transportation sector, largely due to auto demand. Excluding transportation, orders fell 0.6%, the third decline in four months.
Also this morning, bank profits continued to grow during Q1, reaching their best levels since the second quarter of 2007, according to the the Federal Deposit Insurance Corp's quarterly banking report. Q1 bank net income was $35.3 billion, up by $6.6 billion from the year-ago quarter as lower provisions for loan losses contributed to earnings improvements.
Overseas, data from the U.K. today shows its economy contracted by 0.3% during the first three months of the year, deeper than the 0.2% previously reported. The data confirms a double-dip recession and undermines hopes that the British economy was moving towards recovery. Regional PMI data elsewhere in Europe also showed some deterioration in economic activity while traders remain concerned about Greece's possible exit from the single currency after a meeting of finance and government leaders yesterday in Brussels concluded with no action.
In company news, Hewlett-Packard ( HPQ ) is now up 3.5% at around $21.80 but off a day high $22.66 after unveiling plans to lay off 27,000 employees and voicing cautious optimistism despite a 31% slump in its fiscal Q2 earnings. Despite the big decline for profits, the results beat expectations and the company raised its full-year view.
Pandora ( P ) jumped 15% today after the Internet radio firm reported a $0.12 a share net loss that was narrower than the $0.20 a share loss forecast by most analysts. Sales also topped Wall Street expectations.
Jewelers aren't shining today, with shares of Tiffany's ( TIF ) and Signet Jewelers Ltd ( SIG ) sliding after both firms reduced their guidance for future quarters. TIF is off 9% after the high-end retailer lowered its 2012 EPS view to $3.70 to $3.80, below the $3.97 a share consensus call of analysts. Management previously expected earnings of between $3.95 to $4.05 a share.
Q1 earnings at TIF also trailed forecasts after growing only 0.6% during the priod as slowing economic growth in many countries and softness in its U.S. operations kept revenue growth below expectations.
Signet shares are down 10% after the jewelers' Q1 revenue missed expectations and the company provided Q2 earnings guidance below the Street view. SIG projects earnings per share of between $0.78 and $0.84 during the current quarter, below the $0.90 a share that analysts polled by Thomson Reuters, on average, are expecting.
Commodities are mostly higher. Natural-gas futures are now paring their losses after supply data found inventories rose by 77 billion cubic feet rise during the week ended May 18. Working gas in storage was 2,744 billion cubic feet, topping both year-ago and the five-year average, according to U.S. Energy Information Agency estimates. At last look, natural gas for June delivery is down just under 4 cents at $2.698 per 1 million British thermal units.
July crude oil is up $1.33 at $91.23 a barrel. June gold is up $24.70 to $1,573.60 an ounce while July silver is up 89.1 cents to $28.41 an ounce. July copper is up nearly 5 cents at $3.4460 a pound.
Among energy ETFs, the United States Oil fund is up 1.00% to $34.43 with the United States Natural Gas fund down 0.79% to $19.27. Among precious-metal funds, the Market Vectors Gold Miners ETF is up 0.27% to $44.56 while SPDR Gold Shares are up 0.52% to $152.41. The iShares Silver Trust is up 1.74% to $27.51.
Here's where the markets stand at mid-day:
NYSE Composite Index up 4.50 (+0.06%) to 7,545.4004
Dow Jones Industrial Average up 0.95 (+0.01%) to 12,497.10
S&P 500 down 0.15 (-0.01%) to 1,318.70
NASDAQ Composite down 0.30% to 2,841.56
Nikkei 225 up 0.08%
Hang Seng Index down 0.64%
Shanghai China Composite Index down 0.53%
FTSE 100 up 1.81%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 0.07% to 11,501.23
NYSE Financial Sector Index down 0.14% to 4,249.82
NYSE Healthcare Sector Index up 0.57%
(+) VSEC, (+12.5%) Wins 10-year, NIH contract worth up to $20 billion.
(+) PVH, (+6.9%) Q1 earnings jump 61%; strong growth for Calvin Klein, Tommy Hilfiger brands.
(+) SNPS, (+5%) Q2 earnings fell 74% due to acquisition-related charges.
(-) HRB, (was +0.1%, now -0.7%) Names Gregory Macfarlane as new CFO.
(-) NTAP, (-14.5%, hits new year low) Issues bleak guidance, overshadowing 13% Q4 earnings growth.
(-) MNRO, (-9%) Q4 profit rises 27% but trails expectations.
(-) HAS, (-1.0%) Pushes back theatrical release for next "G.I. Joe" movie by nine months.