U.S. stocks disappointed by day's economic news
Enviado: 1/8/2003 17:26CBS MarketWatch
U.S. stocks disappointed by day's economic news
Friday August 1, 11:22 am ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stocks declined Friday as investors disliked a report revealing more jobs were lost last month and shrugged off a release showing the manufacturing sector expanded for the first time in five months.
"We've priced in perfection and that's what we need to sustain these levels," remarked Art Hogan, chief market strategist at Jefferies & Co. "We got a mixed bag of economic news today. [The losses in] in manufacturing payrolls were a big disappointment."
Walt Disney was one of only a handful of Dow components on the rise after announcing upbeat quarterly results. Shares reached a new 52-week high.
The Dow Jones Industrial Average (CBOT^DJINews) gave up 76 points, or 0.8 percent, to 9,157, held back by J.P. Morgan Chase, Merck and Johnson & Johnson following an analyst downgrade.
The Nasdaq Composite (NasdaqSC^IXICNews) lost 17 points, or 1 percent, to 1,717 and the Nasdaq 100 Index (NasdaqSC^NDXNews) pulled back 11 points, or 0.9 percent, to 1,265.
The Standard & Poor's 500 Index (CBOE^SPXNews) slumped 1 percent to 979 and the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks fell 1.8 percent.
On the sector front, oil, drug and airline shares were among the biggest decliners.
Financial issues also took a hit, with worries mounting that the recent surge in bond yields would sting the bank and brokerage sectors.
Hogan said the brokers bragged about stellar results in their fixed-income divisions during the second quarter and that the group is now bound to feel the pinch as yields have skyrocketed since the end of June.
Volume came in at 499 million on the NYSE and at 576 million on the Nasdaq Stock Market. Decliners squashed advancers by 22 to 7 on the NYSE and by 20 to 8 on the Nasdaq.
Inside the day's economic data
Nonfarm payrolls continued to decline, with 44,000 positions lost in July compared with economists' projections for a 13,000 increase. Adding to the negativity, June nonfarm payrolls were downwardly revised to show a loss of 72,000 jobs compared with the previously reported 30,000.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said a bright spot was the growth in temporary help, since big swings in temp jobs lead overall employment by a few months.
The unemployment rate dipped to 6.2 percent in July, down from June's 6.4 percent reading and less than the 6.4 percent that had been expected by economists.
Meanwhile, the closely watched manufacturing index from the Institute of Supply Management rose to an as-expected 51.8 percent in July from June's 49.8 percent. Readings above the 50 percent mark denote an expanding factory sector while readings below that level signal contraction.
In other economic news, the University of Michigan's consumer sentiment index ascended to 90.0 in July from June's 89.7.
June personal income rose by an as-expected 0.3 percent and consumer spending also gained 0.3 percent, less than the 0.5 percent increase that had been expected.
And June construction spending was flat in June compared with expectations that it increased by 0.5 percent.
Challenging month to begin
One of the worst months for the market is about to commence. The closely followed Stock Trader's Almanac notes that August has become the worst month for the Dow Industrials and the broader S&P 500 over the past 15 years and the third worst month for the Nasdaq.
But equities continued to see inflows. Trim Tabs estimated that all equity funds witnessed inflows of $600 million over the week ended July 30 compared with inflows of $4.1 billion in the prior week.
And equity funds that invest primarily in U.S. stocks saw inflows of $1.2 billion versus inflows of $3.2 billion during the prior week, Trim Tabs said.
Disney rallies after results; Cigna off
Dow stock Walt Disney (NYSEDISNews) jumped almost 3 percent after registering late Thursday a fiscal third-quarter profit that bested Wall Street's expectations as the entertainment titan saw a good performance in its film and television network businesses.
SoundView Technology Group said Disney's improvement was "broad-based and significant," noting that parks and resorts have registered attendance growth after a difficult June quarter.
Smith Barney said Disney's quarter outperformed its expectations in every division and lifted its 2003 earnings forecast as a result.
Cigna (NYSECINews) shed 3.1 percent after reporting second-quarter adjusted income from continuing operations that bested Wall Street's expectations. The insurance company also backed its full-year forecast for adjusted income.
ChevronTexaco (NYSECVXNews) lost 1 percent after posting a second-quarter profit from operations that bested the consensus estimate on Wall Street.
In merger action, Lockheed Martin (NYSELMTNews) said it would purchase the federal government information technology business of Affiliated Computer Services (NYSEACSNews) for $551 million in cash and assets. Lockheed lost 0.7 percent and ACS slid 3.3 percent.
In analyst actions, Merrill Lynch downgraded the shares of Johnson & Johnson (NYSEJNJNews) to a "neutral" from a "buy," feeling that the Dow component faces myriad issues over the near term that'll cap potential expansion in its price-to-earnings ratio. Shares shaved 2.7 percent and were one of the blue-chip indexes worst performers.
Sanmina-SCI (NasdaqNMSANMNews) jumped 7 percent on news that Tellabs would outsource the manufacturing of its North American products to the company. Tellabs (NasdaqNMTLABNews) will shed jobs as a result and register a charge in the third quarter related to the expense. The stock descended 1.2 percent in recent deals.
See Movers & Shakers for the latest individual stock action.
More Treasury dumping
Treasurys continued to take it on the chin, unable to derive solace from the drop in nonfarm payrolls on Friday.
Most of the latest economic reports have been better than expected, spooking a bond market that mounted a mammoth spring rally.
In recent exchanges, the 10-year Treasury note was off 11/32 to yield (CBOE^TNXNews) 4.455 percent while the 30-year government bond slipped 14/32 to yield (CBOE^TYXNews) 5.39 percent.
In currencies, the U.S. dollar was down 0.1 percent to 120.42 yen while the euro dipped 0.5 percent to $1.1189.
U.S. stocks disappointed by day's economic news
Friday August 1, 11:22 am ET
By Julie Rannazzisi
NEW YORK (CBS.MW) -- U.S. stocks declined Friday as investors disliked a report revealing more jobs were lost last month and shrugged off a release showing the manufacturing sector expanded for the first time in five months.
"We've priced in perfection and that's what we need to sustain these levels," remarked Art Hogan, chief market strategist at Jefferies & Co. "We got a mixed bag of economic news today. [The losses in] in manufacturing payrolls were a big disappointment."
Walt Disney was one of only a handful of Dow components on the rise after announcing upbeat quarterly results. Shares reached a new 52-week high.
The Dow Jones Industrial Average (CBOT^DJINews) gave up 76 points, or 0.8 percent, to 9,157, held back by J.P. Morgan Chase, Merck and Johnson & Johnson following an analyst downgrade.
The Nasdaq Composite (NasdaqSC^IXICNews) lost 17 points, or 1 percent, to 1,717 and the Nasdaq 100 Index (NasdaqSC^NDXNews) pulled back 11 points, or 0.9 percent, to 1,265.
The Standard & Poor's 500 Index (CBOE^SPXNews) slumped 1 percent to 979 and the Russell 2000 Index (CBOE^RUTNews) of small-capitalization stocks fell 1.8 percent.
On the sector front, oil, drug and airline shares were among the biggest decliners.
Financial issues also took a hit, with worries mounting that the recent surge in bond yields would sting the bank and brokerage sectors.
Hogan said the brokers bragged about stellar results in their fixed-income divisions during the second quarter and that the group is now bound to feel the pinch as yields have skyrocketed since the end of June.
Volume came in at 499 million on the NYSE and at 576 million on the Nasdaq Stock Market. Decliners squashed advancers by 22 to 7 on the NYSE and by 20 to 8 on the Nasdaq.
Inside the day's economic data
Nonfarm payrolls continued to decline, with 44,000 positions lost in July compared with economists' projections for a 13,000 increase. Adding to the negativity, June nonfarm payrolls were downwardly revised to show a loss of 72,000 jobs compared with the previously reported 30,000.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said a bright spot was the growth in temporary help, since big swings in temp jobs lead overall employment by a few months.
The unemployment rate dipped to 6.2 percent in July, down from June's 6.4 percent reading and less than the 6.4 percent that had been expected by economists.
Meanwhile, the closely watched manufacturing index from the Institute of Supply Management rose to an as-expected 51.8 percent in July from June's 49.8 percent. Readings above the 50 percent mark denote an expanding factory sector while readings below that level signal contraction.
In other economic news, the University of Michigan's consumer sentiment index ascended to 90.0 in July from June's 89.7.
June personal income rose by an as-expected 0.3 percent and consumer spending also gained 0.3 percent, less than the 0.5 percent increase that had been expected.
And June construction spending was flat in June compared with expectations that it increased by 0.5 percent.
Challenging month to begin
One of the worst months for the market is about to commence. The closely followed Stock Trader's Almanac notes that August has become the worst month for the Dow Industrials and the broader S&P 500 over the past 15 years and the third worst month for the Nasdaq.
But equities continued to see inflows. Trim Tabs estimated that all equity funds witnessed inflows of $600 million over the week ended July 30 compared with inflows of $4.1 billion in the prior week.
And equity funds that invest primarily in U.S. stocks saw inflows of $1.2 billion versus inflows of $3.2 billion during the prior week, Trim Tabs said.
Disney rallies after results; Cigna off
Dow stock Walt Disney (NYSEDISNews) jumped almost 3 percent after registering late Thursday a fiscal third-quarter profit that bested Wall Street's expectations as the entertainment titan saw a good performance in its film and television network businesses.
SoundView Technology Group said Disney's improvement was "broad-based and significant," noting that parks and resorts have registered attendance growth after a difficult June quarter.
Smith Barney said Disney's quarter outperformed its expectations in every division and lifted its 2003 earnings forecast as a result.
Cigna (NYSECINews) shed 3.1 percent after reporting second-quarter adjusted income from continuing operations that bested Wall Street's expectations. The insurance company also backed its full-year forecast for adjusted income.
ChevronTexaco (NYSECVXNews) lost 1 percent after posting a second-quarter profit from operations that bested the consensus estimate on Wall Street.
In merger action, Lockheed Martin (NYSELMTNews) said it would purchase the federal government information technology business of Affiliated Computer Services (NYSEACSNews) for $551 million in cash and assets. Lockheed lost 0.7 percent and ACS slid 3.3 percent.
In analyst actions, Merrill Lynch downgraded the shares of Johnson & Johnson (NYSEJNJNews) to a "neutral" from a "buy," feeling that the Dow component faces myriad issues over the near term that'll cap potential expansion in its price-to-earnings ratio. Shares shaved 2.7 percent and were one of the blue-chip indexes worst performers.
Sanmina-SCI (NasdaqNMSANMNews) jumped 7 percent on news that Tellabs would outsource the manufacturing of its North American products to the company. Tellabs (NasdaqNMTLABNews) will shed jobs as a result and register a charge in the third quarter related to the expense. The stock descended 1.2 percent in recent deals.
See Movers & Shakers for the latest individual stock action.
More Treasury dumping
Treasurys continued to take it on the chin, unable to derive solace from the drop in nonfarm payrolls on Friday.
Most of the latest economic reports have been better than expected, spooking a bond market that mounted a mammoth spring rally.
In recent exchanges, the 10-year Treasury note was off 11/32 to yield (CBOE^TNXNews) 4.455 percent while the 30-year government bond slipped 14/32 to yield (CBOE^TYXNews) 5.39 percent.
In currencies, the U.S. dollar was down 0.1 percent to 120.42 yen while the euro dipped 0.5 percent to $1.1189.