Midday Update: Stocks Struggle To Maintain Early Advance

Stocks are struggling to overcome yesterday's negative bias, with conflicting economic data and mixed corporate earnings continuing to strain early gains for equities. Trading kicked off with weaker-than-expected housing market data overshadowing upbeat earnings from Morgan Stanley ( MS ) and General Electric ( GE ). A drop in consumer sentiment along with missed earnings results by United Parcel Service ( UPS ) and Intel ( INTC ) also is keeping a lid on stocks, with the decline for Intel dragging the Nasdaq Composite index lower for the first time in four days.

The Commerce Department said housing starts fell 9.8% during December to a seasonally adjusted annual pace of 999,000, with the reported decline exceeding the already dismal 9.2% drop market experts were expecting. Permits fell 3.0% year over year to 986,000, missing estimates calling for only a 0.2% decline.

But while rising interest rates continue to stifle the housing market, the manufacturing sector keeps outperforming expectations, with new Federal Reserve data finding a 0.3% bump in industrial production during December, the fifth month in a row factory output rose and capping the strongest quarter since 2010. Capacity utilization climbed to 79.2%, beating estimates and reaching levels not seen since May 2008.

The Reuters/University of Michigan index of consumer sentiment tumbled to a preliminary 80.4 reading in January, missing estimates looking for a 1.0 rise over December levels to an 83.5 reading this month. Economists attributed a portion of the January decline in sentiment to extreme winter weather and a weak December jobs report although Wall Street obviously is taking notice today of the deteriorating consumer attitudes at the start of 2014. Final results for January are due out Jan. 31.

Finally, there were more than 4 million jobs available during November, a six-month high, according to an survey of job openings and labor turnover (JOLTS) by the Bureau of Labor Statistics. But what really has the Street buzzing today was the 4.258 million job separations in November, up from 4.205 million during the prior month - underscoring employees' rising confidence in finding a new job as the job market continues to improve.

European markets managed to squeeze out slim gains in tandem with the opening strength in the U.S. and much better than expected UK retail sales. Like the U.S., Europe is wading through mixed earnings, but the general consensus remains that both the UK and Germany will lead Europe out of its crippling recession.

Crude oil was up $0.25 to $94.23 per barrel. Natural gas was down $0.05 to $4.27 per 1 million BTU. Gold was up $11.10 to $1,251.40 an ounce, while silver was up $0.29 to $20.35 an ounce. Copper was up $0.01 to $3.35 per pound.

Among energy ETFs, the United States Oil Fund was up 0.39% to $33.78 with the United States Natural Gas Fund was down 1.29% to $21.00. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 2.68% to 23.22 while SPDR Gold Shares was up 0.79% to $120.73. The iShares Silver Trust was up 1.34% to $19.61.

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

NYSE Composite Index up 2.17 (+0.02%) to 10,378.40

Dow Jones Industrial Average up 60.43 (+0.37%) to 16,477.44

S&P 500 down 0.56 (-0.03%) to 1,845.33

Nasdaq Composite Index down 4.43 (-0.10%) to 4,214.26


Nikkei 225 Index down 0.08%

Hang Seng Index up 0.64%

Shanghai China Composite Index down 0.93%

FTSE 100 Index up 0.20%

CAC 40 up 0.19%

DAX up 0.26%


Energy Sector Index up 0.52%

NYSE Financial Sector Index up 0.16%

NYSE Healthcare Sector Index down 0.08%


(+) EA (+12.12%) The company's Battlefield 4, Madden NFL 25 and FIFA 14 games all made the NPD Group's best seller list for 2013.

(+) EFUT (+14.23%) Signed an agreement with China supermarket operator Yonghui Superstores Co. to launch myStore, a social-shopping network.

(+) KERX (+9.41%) Said its Japanese partner, Japan Tobacco Inc. (JT), received manufacturing and marketing approval of ferric citrate from the Japanese Ministry of Health, Labour and Welfare.


(-) HLIT (-8.15%) Downgrade to Underperform from Market Perform at Raymond James.

(-) AAWW (-15.38%) British Airways plans to return three aircraft and exit its cargo-freighter service

(-) FCEL (-12.80%) Priced an offering of 22 million shares priced at $1.25 each, generating about $27.5 million in gross proceeds.

(-) SSNI (-23.66%) Baird downgrades Silver Spring Networks to Neutral from Outperform and slashed its price target to $17 from $32 a share.

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

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

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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