Markets

Midday Update: Stocks Lose Momentum After Challenging Record Highs

Soft retail sales took some of the wind out of stock market advances Tuesday morning although it did not prevent the S&P 500 from breaching 1900 for the first time ever. After touching new record highs thanks to more M&A activity and strength in European markets, stocks retreated as profit-taking re-emerged, pulling both the Dow Industrials and the S&P 500 off their best levels of the session. The Nasdaq Composite index also was losing ground.

The retail sales report was a mixed bag with April sales increasing an anemic 0.1% although March activity was revised to a 1.5% advance from the 1.1% gain initially reported. Excluding the auto and gas sectors, retail sales contracted 0.1% in April following an upwardly revised rise of 1.3% during March.

With eyes on retail sales, the decline in export and import prices was largely ignored, even though both were well below estimates. April import prices were down 0.4%, missing estimates for a 0.4% gain. Export prices dropped 1.0% versus the consensus for a 0.2% increase.

Finally, businesses continue to stockpile inventory, albeit at a slower pace. In March, business inventories rose 0.4% compared to an upwardly revised gain of 0.5% the month prior. The street was looking for a gain of 0.5% in March inventories.

As European markets close, the major indices are all holding onto earlier gains as the odds for an EU rate cut next month improve. Overnight, the Wall Street Journal reported that the Bundesbank -- known for preferring more restrictive monetary policy -- said that it was behind a possible decision by the European Central Bank to cut short-term rates below 0%. This helped offset pressure on equities associated with weak German business sentiment and bearish Chinese manufacturing and retail sales data.

Crude oil was up $0.70 to $101.29 per barrel. Natural gas was down $0.04 to $4.40 per 1 million BTU. Gold was down $0.30 to $1,295.50 an ounce, while silver was up $0.02 to $19.56 an ounce. Copper was down $0.02 to $3.13 per pound.

Among energy ETFs, the United States Oil Fund was up 0.83% to $36.90 with the United States Natural Gas Fund was down 0.86% to $24.30. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.09% to 23.90 while SPDR Gold Shares were down 0.10% to $124.82. The iShares Silver Trust was up 0.10% to $18.78.

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

NYSE Composite Index up 1.37 (+0.01%) to 10,704.87

Dow Jones Industrial Average up 23.79 (+0.14%) too 16,719.26

S&P 500 up 1.14 (+0.06%) to 1,897.79

Nasdaq Composite Index down 11.71 (-0.28%) to 4,132.15

GLOBAL SENTIMENT

Nikkei 225 Index up 1.95%

Hang Seng Index up 0.41%

Shanghai China Composite Index down 0.10%

FTSE 100 Index up 0.31%

CAC 40 up 0.25%

DAX up +0.54%

NYSE SECTOR INDICES

NYSE Energy Sector Index up 0.21%

NYSE Financial Sector Index down 0.14%

NYSE Healthcare Sector Index up 0.20%

UPSIDE MOVERS

(+) EVDY (+17.84%) Posts narrower Q1 loss vs estimates, beats on revenue.

(+) NFEC (+30.21%) Q1 revenue rises, expects additional sales increases.

(+) HALO (+15.43%) Drug trial results offset disappointing earnings results.

(+) RAX (+8.94%) Reported better than expected earnings.

DOWNSIDE MOVERS

(-) PVA (-6.25%) Post a wider Q1 loss compared to estimates, but beats on revenue.

(-) DXPE (-38.79%) Missed on both earnings and revenue estimates.

(-) RDEN (-18.36%) Missed earnings estimates.

(-) INTX (-15.54%) Swung to a loss for Q1, revenue declines.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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