Midday Update: Stocks Retreat Off Highs As Early Rally Loses Steam
Stocks are holding onto modest gains Wednesday but were off their best levels of the day after an opening rally tied to positive durable goods orders, easing tensions over Ukraine3 and hopes for global stimulus measures ran out of steam.
A knee-jerk reaction to the impressive gain in February durable goods orders quickly unraveled when closer examination of the data showed the 2.2% gain was distorted by a 13.6% surge in aircraft orders. A disappointing debut of the King Entertainment ( KING ) in its first day as a publicly traded company and heavy pressure on technology stocks also was leading to a gradual retreat in all three indices.
Blue chips are staying afloat largely thanks to gains in drug and chip-maker stocks while the S&P 500 is getting a boost from the healthcare and telecommunications sector. But after outperforming before the opening bell thanks to another multi-billion dollar deal from Facebook (FB,) the Nasdaq Composite index was lagging the other market indices and drifting between positive and negative territory.
Thanks to a 13.6% increase in aircraft orders, durable goods orders rose 2.2% in February, more than twice expectations. But excluding transportation orders, durable goods were up only 0.2%, missing the consensus estimate of a 0.3% gain. Furthermore, there were downward revisions to January figures, also taking some of the positive impact out of the data.
The purchasing managers index for the services industry improved to 55.5 in March from 52.7 the month prior. Although the index was market-friendly, it was largely ignored.
Yesterday's strong close in the U.S. spilled into the European session and pushed the UK FTSE to a 2-week high. European markets are hoping that disappointing economic data from China and deflation risks in the EU will result in additional stimulus measures.
Crude oil was up $0.55 to $99.74 per barrel. Natural gas was down $0.04 to $4.37 per 1 million BTU. Gold was down $7.00 to $1,304.20 an ounce, while silver was down $0.17 to $19.81 an ounce. Copper was down $0.04 to $2.96 per pound.
Among energy ETFs, the United States Oil Fund was up 0.67% to $36.01 with the United States Natural Gas Fund was down 0.90% to $24.34. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 2.14% to 24.00 while SPDR Gold Shares was down 0.66% to $125.57. The iShares Silver Trust was down 0.88% to $19.05.
Here's where the markets stand at mid-day:
NYSE Composite Index up 21.34 (+0.20%) to 10,438.40
Dow Jones Industrial Average up 37.86 (+0.23%) to 16,405.74
S&P 500 up 4.89 (+0.26%) to 1,870.51
Nasdaq Composite Index down 4.97 (-0.12%) to 4,229.29
Nikkei 225 Index up 0.37%
Hang Seng Index up 0.72%
Shanghai China Composite Index down 0.18%
FTSE 100 Index up 0.05%
CAC 40 up 0.89%
DAX up 1.05%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 0.31%
NYSE Financial Sector Index unchanged
NYSE Healthcare Sector Index up 0.66%
(+) SCS (+12.41%) Reported better-than-expected Q4 fiscal 2014 adjusted earnings and revenues
(+) CXDC (+13.73%) Reported Q4 net income of $57.5 million, or $0.89 per share, compared with the prior-year period's $17.3 million, or $0.36 per share.
(+) HTM (+6.47%) Posted 2013 net income of $1.9 million, or $0.02 per share, compared with a 2012 net loss of $3 million, or $0.03 per share
(-) BODY (-27.78%) Reported Q4 revenue of $66.2 million, below the analyst consensus of $75 million on Capital IQ.
(-) GOMO Reported that Q4 expenses outpaced sales
(-) EXEL (-36.95%) Update on COMET-1 phase 3 trial doesn't say if primary endpoint was achieved
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