U.S. equities slid with the Dow losing 113 points as another round earnings and ongoing concerns surrounding the Fed's tapering plans following U.S. PPI weighed on sentiment. Consumer Discretionary led stocks lower after Macy’s reported disappointing results, while Technology was the only major sector in the black. Commodities rallied with Gold, Crude Oil and Nat Gas posting gains. Of note, today Brent Crude Oil prices hit a 4-month high.
The Producer Price Index for July came in much softer than expected, largely due to a surprise drop in energy costs. The July PPI reading was flat, missing the +0.3% consensus estimate, and much lower than the 0.8% jump in June. Reports like todays PPI may lead some of the dovish Fed officials to argue again that inflation is too low, implying that taper may not happen in September. But key inflation rests in tomorrow's CPI reports - stay tuned.
In other news, Eurozone GDP expanded 0.3% on quarter in Q2, signaling an end to the region's recession. The growth represented a recovery from contraction of 0.3% in Q1 and topped consensus of +0.2%. Germany expanded again in Q2 after GDP was flat in Q1, boosted by domestic demand, fixed capital formation and a trade surplus. France exited recession, as did - most surprisingly - Portugal, whose economy grew 1.1%.
Market Indices/Statistics:
- Dow closed down 113.35 pts/-0.73% to 15,337.66; 23 of the 30 Dow stocks closed lower.
- S&P closed down 8.77 pts/-0.52% to 1,685.39; 9 of the 10 S&P 500 sectors closed lower.
- Nasdaq closed down 15.17 pts/-0.41% to 3,669.27
- Discretionary was the weakest (-1.07%) Technology was the strongest sector (+0.01 %),
- The VIX is up 0.73 to 13.04
- Gold is up 14.10 to 1334.7
- Oil is up 0.24 to 106.64
- Nat Gas is up 0.054 to 3.494
- Euro vs. Dollar is down 0.0005 to 1.3256
- Yen vs. Dollar is down 0.11 to 98.09
Top Headlines:
Envision Healthcare Holdings, Inc. (EVHC, $25.15), a provider of outsourced emergency medical and ambulance services, jumped 9.35% in their debut listing here at the NYSE after the company priced a 42M share IPO (upsized from 35M) at $23 per share, which was the high end of the expected $20-23 range.
Shares of Macy's Inc. (M, $46.33) fell 4.47% percent, and was the largest percentage decliner on the S&P 500 after the company reported an unexpected decline in sales and profits in the second quarter, which led to cutting its full-year earnings forecast. Macy’s cited consumers' hesitation to spend on non-essentials, leading the department store chain to cut prices.
Deere & Co. (DE, $82.34) reported a much higher-than-expected quarterly profit on strong tractor and harvester sales in the Americas, yet the stock traded lower on the day, closing down 1.87% as several analysts cut their outlooks and share-price targets for Deere in recent days, citing concerns that farmers will slash their capital spending because of plunging grain prices.
Earnings After the Bell:
Aligent (A) reports Q2 EPS of 0.68c, vs. Est. 0.62c
AdCare Health Systems (ADK) reports Q2 EPS of (0.41), vs. Est. (0.12)
GSE Systems (GVP) reports Q2 EPS of (0.09), vs. Est. (0.04)
Cisco Systems (CSCO) reports Q2 EPS of 0.52c, vs. Est. 0.51c
NetApp, (NTAP) reports Q2 EPS of 0.53c, vs. Est. 0.49c
WidePoint (WYY) reports Q2 revenue of 11.3M, vs. Est. 14.0M
Coming Thursday
U.S. Economic Reports:
Initial Jobless Claims at 8:30am (Aug-10) consensus 335K, prior 333K
Continuing Claims at 8:30am (Aug-3) consensus 3000K, prior 3018K
Empire Manufacturing at 8:30am (Aug) consensus 8.5, prior 9.5
CPI at 8:30am (July) consensus +0.2%, prior +0.5%
CPI ex Food & Energy at 8:30am (July) consensus +0.2%, prior +0.2%
Industrial Production at 9:15am (July) consensus +0.4%, prior +0.3%
NAHB Housing Market Index at 10am (Aug) consensus 56, prior 57
Philadelphia Fed Index at 10am (Aug) consensus +13.7, prior +19.8
Earnings Thursday:
BMO : Briggs & Stratton (BGG) Est. 0.19c; E-Commerce China Dangdang (DANG) Est. (0.14); Estee Lauder (EL) Est. 0.21c; G & K Services (GK) Est. 0.64c ; Kohl’s (KSS) Est. $1.04 ; Manchester United (MANU) Est. (0.02) ; Navios Maritime Holdings (NM) Est. (0.11) ; The Phoenix Co’s (PNX) Est. $2.50 ; Perrigo Co. (PRGO) Est. $1.56; ReneSola Ltd. (SOL) Est. (0.30); Wal-Mart Stores (WMT) Est. $1.25
AMC: Applied Materials (AMAT) Est. 0.19c; Aeroflex (ARX) Est. .022c ; Bally Technologies (BYI) Est. 0.94c ; First Marblehead (FMD) Est. (0.11) ; J.W. Nordstrom (JWN) Est. 0.88c
Here at the NYSE
On Thursday, August 15, executives and guests of Oxford Industries(NYSE:OXM) and its Tommy Bahama® business will visit the New York Stock Exchange(NYSE) to mark the 20thanniversary of the Tommy Bahama brand and National Relaxation Day , a holiday that celebrates Tommy Bahama’s philosophy to relax in style andmake life one long weekend.
To highlight the occasion, Oxford Industries CEO and President Thomas C. Chubb III and Tommy Bahama Group CEO Terry R. Pillow will ring the NYSE Closing Bell.
Please remember to check in with us every morning for the NYSE Morning Update! http://exchanges.nyx.com/parasnand-madho/nyse-morning-update-05022013
Thanks and have a great evening!
