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U.S. Equities Under Pressure; Domestic Data Disappoints

Posted
4/3/2013 12:09:00 PM
By: MT Newswires
Referenced Stocks:PVA

U.S. stocks are experiencing selling pressure after yet another record run up yesterday for the Dow and S&P 500. Futures turned mixed prior to the open after the government issued its monthly ADP report showing the economy added 158,000 private-sector jobs in March, well below the 205,000 consensus forecast of economists. In addition, the ISM services Index reading slightly missed the mark, adding to the negative tone. As a result, buyers have taken a well-deserved breather this morning.

While the ADP reading was a disappointment, it usually doesn't have as much of an impact as the official Labor Department payroll data, because on a month-to-month basis the ADP can vary significantly compared to the official government figures. On a longer-term basis, however, the correlation is stronger. The official government employment figures are on tap for this Friday.

The ISM services number came in at 54.4, down from 56.0 in the prior month and contrasted to consensus forecasts for a more modest pull back to 55.5. The reading was the lowest since August, mirroring Monday's lower-than-expected ISM manufacturing data. Despite the downtrend in March, the U.S. economy is still showing slow growth. Market participants, however, may begin to fret that a downtrend is in place, which could put a damper on the current bull run in equities.

A series of speeches by Federal Reserve officials are on tap today, beginning with. Gov. Daniel Tarullo's pre-market appearance on CNBC at 8:30 a.m. ET. San Francisco Fed President John Williams is set to speak on the economy and monetary policy in Los Angeles at 3:30 p.m ET, while St. Louis Fed President James Bullard will take place in a question-and-answer session with reporters following Columbia University's Glenn Hubbard's speech on financial reform. That speech is scheduled for 5 p.m. ET.

European bourses are trading lower, while Asian shares ended mixed.

Commodity prices were lower across the board at midday, with oil showing relative weakness, down $1.49, at $95.70 a barrel. Natural gas was down $0.022 to $3.947 per million BTUs.

Gold futures continued their downtrend, down $5.00 to $1570.90 per ounce, while silver was down $0.163, to $27.085 per ounce. Copper was down $0.0331 to $3.4375.

Here's where the markets stood at mid-day:

NYSE Composite down 63.51 (-0.70%) to 9,029.38

Dow Jones Industrial Average down 58.07 (-0.40%) to 14,603.94

S&P 500 down 9.24 (-0.59%) to 1,561.01

Nasdaq Composite Index down 16.47 (-0.51%) to 3,238.40

GLOBAL SENTIMENT

Nikkei 225 Index up 2.99%

Hang Seng Index down 0.14%

Shanghai China Composite Index down 0.12%

FTSE 100 down 1.13%.

DAX down 0.90%.

CAC 40 down 1.32%.

NYSE SECTOR INDICES

NYSE Energy Sector Index (^NYE) down 103.44 (-0.79%) at 13,071.87

NYSE Financial Sector Index (^NYK) down 54.80 (-1.00%) to 5,439.20

NYSE Healthcare Sector Index (^NYP) down 22.53 (-0.25%) to 8,984.62

UPSIDE MOVERS:

(+) MHR (+7.5%) Stock lifts after company announces it has signed a definitive agreement to sell all of its ownership interests in the Eagle Ford Shale oil and gas properties in Gonzales and Lavaca Counties of South Texas to a wholly-owned subsidiary of Penn Virginia Corporation ( PVA ) for a total purchase price of $401 million.

(+) ASTX (+7.4%) Shares jump after company announced that it had had 13 abstracts on internal and pipeline-funded product data accepted for poster or oral presentation at the American Association for Cancer Research annual meeting later this week.

(+) JOSB (+1.2%) Stock rises after men's clothier reported FY12 earnings of $2.84 per share, versus the Capital IQ consensus of $2.81. Revenues were $1.05 billion, versus the analyst estimate of $1.07 billion. Combined comparable store and Internet sales for the year increased 2% when compared to FY11.

DOWNSIDE MOVERS:

(-) MSPD (-18.2%) Shares take hit after the firm said it expected a shortfall in Q2 revenue, with Q2 net product revenue between $35.1 to $35.5 mln, compared with management's prior outlook for revenue to be approximately flat to up or down 2% versus total net product revenue in the fiscal first quarter of 2013 of $38.4 mln.

(-) ELN (-9.6%) Shares drop following company's report that the Irish Takeover Panel has imposed an expected deadline of May 10 on Royalty Pharma. Following the firm's initial indication of interest announced on 25 February, it must now either make an offer for Elan or announce that it will not proceed with an offer by the May deadline, the Panel ruled.

(-) GPN (- 3.7%) Stock falls after the company reported late Tuesday Q3 earnings of $0.87 per share, missing the Capital IQ consensus of $0.89. Revenues of $578.7 million, however, beat the analyst estimate of $577.47 million. The company expects FY13 EPS $3.64 - $3.71 on revenues of $2.36 billion -$2.40 billion. The Street view is EPS of $3.70 on revenues of $2.40 billion.