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Stocks inched lower Thursday afternoon even as new economic data appeared to reinforce the bulls' hopes for economic recovery.
Today’s Markets
As of 2:10 p.m. EDT, the Dow Jones Industrial Average fell 9.30 points, or 0.09%, to 9782.71, the Standard & Poor's 500 slid 3.29 points, or 0.31%, to 1065.47 and the Nasdaq Composite lost 7.33 points, or 0.34%, to 2125.81. The consumer-friendly FOX 50 dropped 0.42 points, or 0.05%, to 772.69.
It's been a bumpy day of trading on Wall Street as the Dow initially opened flat before climbing as much as 65 points and then returning to the flatline. The choppy trading comes even though new economic data showed Mid-Atlantic manufacturing activity returned in September to pre-recession levels and initial jobless claims surprisingly declined last week.
Aside from the better-than-expected economic data, the markets were focused on fluctuating and Oracle’s (ORCL) worse-than-expected quarterly revenue.
The apprehension on Wall Street comes after the markets climbed to new 2009 highs in each of the last two sessions. Stocks have closed in the green in eight of the previous nine sessions amid growing economic optimism.
“We are pricing in a lot of good news and not a lot of disappointment. For sure, there is going to be some disappointment out there,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “We’ve been basically going in a straight line since the early part of March. The momentum is clearly driving the train right now.”
Caterpillar (CAT) and Bank of America (BAC) were the biggest percentage winners on the Dow in recent trading, climbing nearly 2% a piece. Alcoa (AA), which had earlier been higher, and Traveler's (TRV) were the biggest drags on the index.
Despite the hot streak, some remain concerned about a possible pullback for stocks.
"I am thrilled to see my portfolio increase in value -- across the board -- but I am still more comfortable selling than buying. There are some unique opportunities overseas -- in China specific -- but by and large I do feel as though selling rather than buying just makes more sense," Peter Kenny, managing director at Knight Capital Group, said in a note.
Stocks hit session highs just before the release of the Philly Fed survey, which showed manufacturing activity in the Mid-Atlantic climbed in September to the highest level since June 2007. The index jumped from 4.2 last month to 14.1 in September, beating economists' forecast for a reading of 8. Any positive reading indicates expansion. The news lifted shares of manufacturers like GE and United Technologies (UTX).
The markets initially struggledto rally around a Labor Department report that suggested the job market continued to slowly improve last week. The government said initial jobless claims fell by 12,000 last week, surprising analysts who expected a modest rise. However, the number of people who remained on unemployment benefits for more than a week jumped by 129,000 to 6.28 million.
“Bottom line, the data continues to reflect that the pace of firing is moderating but the pace of hiring still remains sluggish,” Peter Boockvar, equity strategist at Miller Tabak, wrote in a note.
Economists have pointed to the still-weak job market as a potential hurdle for the U.S. economy to return to steady growth. High unemployment threatens consumer spending, which accounts for some 70% of U.S. GDP.
Meanwhile, the Commerce Department said housing starts in August rose by 1.5%, less than half the expected rise from economists. Home building stocks like Centex (CTX) and Hovnanian (HOV) were mixed on the news.
In the commodity markets, crude oil alternated between positive and negative territory ahead of the close. Crude was recently down 14 cents a barrel, or 0.19%, to $72.37. After closing at exchange records the previous two sessions, gold fell in recent trading $5.90 an ounce, or 0.58%, to $1014.30.
Business software giant Oracle (ORCL) saw its shares tumble almost 3% a day after the company reported worse-than-expected revenue. Oracle did meet the Street’s non-GAAP EPS view of 30 cents but its shares sank
Corporate Movers
FedEx (FDX) said it suffered a 53% decline in quarterly profit but the economic bellwether’s EPS of 58 cents widely beat Wall Street’s expectations. FedEx said its revenue tumbled by a worse-than-expected 20% amid weaker shipping demand. FedEx backed its fiscal second-quarter guidance for EPS of 65 cents to 95 cents. Analysts have been forecasting EPS of 83 cents.
Discover Financial (DFS) weighed in with better-than-expected earnings for its third quarter, saying it earned $577.5 million, or $1.07 a share, considerably better than the 11-cent loss analysts were looking for. The results included a one-time $287 million after-tax gain related to an antitrust settlement with Visa (V) and MasterCard (MA).
Citigroup (C) is poised to unveil a new advertising campaign aimed at restoring the onetime Dow component’s battered image, the New York Post reported. As soon as next month, Citi plans to launch an ad blitz that will highlight its virtues and attempt to boost confidence in its management team, the Post reported. While several reports in recent days suggest Citi is looking to pare the government’s stake in the bank, regulators have been wary of letting that happen too soon, the paper reported.
American International Group’s (AIG) board of directors shot down new CEO Robert Benmosche’s request for personal use of the bailed-out insurer’s private jet, according to a published report. The board said the use of the aircraft should be limited to business purposes because an exception would require permission from the Treasury Department, Bloomberg News reported. A spokeswoman denied the conflict to the news agency.
Eastman Kodak (EK) said it will receive $700 million in fresh financing from the private equity firm Kohlberg Kravis Roberts & Co. Kodak, which has been a multi-year turnaround plan after its primary product of film became nearly irrelevant, plans to use the cash to potentially pay off debt due next year. However, the financing may give the firm a 20% stake in Kodak.
XenoPort (XNPT) saw its stock soar more than 25% after the company said a pain drug it co-markets with GlaxoSmithKline (GKS) successfully decreased pain intensity. The companies said the drug, gabapentin enacarbil, met the primary goal of a Phase II clinical trial of 376 subjects with post-herpetic neuralgia, which is a neuropathic pain syndrome.
Ivanhoe Energy (IVAN) saw its shares soar to 52-week highs Thursday morning after the Canadian company announced a “major technical breakthrough” in its heavy-to-light technology and an independent review of an Ecuadorian oil field. Ivanhoe said an independent review confirmed a best estimate of 6.4 billion barrels of oil in place at the company’s Pungarayacu oil field.
AMR Corp. (AMR), the parent of American Airlines, said it has obtained $2.9 billion in fresh financing and announced plans to drastically cut back its presence in St. Louis.American Airlines said it will receive $1 billion in liquidity through the advance sale of frequent flier miles to Citigroup, along with $1.6 billion in sale-leaseback deals General Electric (GE).
Global Markets
European markets hit new 2009 highs. The U.K's FTSE 100 climbed 0.78% to 5163.95, France's CAC 40 gained 0.56% to 3835.27 and Germany's DAX rose 0.54% to 5731.14.
In Asia, Japan's Nikkei 225 jumped 1.68% to 10443.80, Hong Kong's Hang Seng climbed 1.71% to 21768.51 and China's Shanghai Composite soared 2.02% to 3060.26.
Affiliated Computer Services Beats StreetFedEx sees more global demand
