Midday Update: Stocks Move to Plus Column But Shy Away From Challenging New Highs
Stocks were little changed Wednesday, drifting in a paper-thin range ahead of the Federal Reserve this afternoon releasing its latest Beige Book assessment of economic conditions in its 12 member districts.
Early weakness tied to a below-consensus rise in private payrolls along with a wider trade deficit evaporated when the services sector showed considerable improvement during May. But attempts to break higher have been thwarted by lingering worries over valuations as well as competition from the Treasury bond market where a 2.60% yield for 10-year notes is catching the attention of yield-hungry investors.
This morning's flurry of economic data kicked off with a 179,000 gain in new private payrolls in May, according to Automatic Data Processing, missing the consensus view looking for a 210,000 rise. April figures also were trimmed to a revised 215,000 from the 220,000 new hires originally reported last month.
The next piece of news was equally bearish, with the U.S. trade deficit expanding 6.3% during April to $47.2 billion from a revised $44.2 billion deficit in March, also missing estimates expecting a $41.0 billion deficit.
Q1 productivity also fell a revised 3.2%, nearly double the decline first reported. Unit labor costs rose a revised 5.7% during the January-to-March period, the Labor Department said, up from initial reports of a 4.2% gain.
But any losses tied to that negative data was nearly erased by the improvement in activity for the services sector. The Institute for Supply Management reported that their May index rose to 56.3 from April's 55.2, beating analyst estimates for an improvement to only 55.3
In Europe, stocks are slightly lower as the financial markets gear up for Thursday's crucial meeting of the European Central Bank. Bearish German and EU PMI data triggered light selling overnight, but attempts to rebound were frustrated by the expectation that the decision by the central bank to increase monetary stimulus will result in a "buy the rumor, sell the fact" reaction across Europe.
Crude oil was up $0.04 to $102.67 per barrel. Natural gas was down $0.03 to $4.60 per 1 million BTU. Gold was down $0.30 $1,244.20 an ounce, while silver was up $0.06 to $18.82 an ounce. Copper was down $0.04 to $3.09 per pound.
Among energy ETFs, the United States Oil Fund was down 0.19% to $37.57 with the United States Natural Gas Fund was up $0.08 to $25.47. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 0.32% to 22.43 while SPDR Gold Shares was down 0.15% to $119.83. The iShares Silver Trust was down 0.06% to $18.09.
Here's where the markets stand at mid-day:
NYSE Composite Index down 1.46 (-0.01%) to 10,768.87
Dow Jones Industrial Average up 5.21 (+0.03%) to 16,727.55
S&P 500 up 2.83 (+0.15%) to 1,927.07
Nasdaq Composite Index up 16.04 (+0.38%) to 4,250.12
Nikkei 225 Index up 0.22%
Hang Seng Index down 0.60%
Shanghai China Composite Index down 0.66%
FTSE 100 Index down 0.26%
CAC 40 down 0.06%
DAX up 0.07%
NYSE SECTOR INDICES
NYSE Energy Sector Index down 0.40%
NYSE Financial Sector Index up 0.16%
NYSE Healthcare Sector Index down 0.20%
(+) SPWR (+8.34%) Selected to build another solar power system at Air Force base
(+) THRD (+31.28%) Acquired by National Penn Bancshares ( NPBC ) for $138 mln
(+) NQ (+29.23%) Committee finds company didn't engage in fraudulent conduct
+) DRWI (+18.66%) Sees Q1 sales up 60% vs Q4
(-) FCEL (-8.90%) Reported a wider Q2 loss on weak revenue
(-) YGE (-4.41%) U.S. may apply anti-subsidy tariffs on Chinese solar-equipment imports
(-) TIBX (-5.70%) Downgraded by Stifel Nicolaus to Hold from Buy
(-) AMCO (-28.87%) China approves import of 20,000 metric tons of restricted materials annually
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