Stocks fail to keep up with the early momentum
US stocks ended mostly lower on Thursday, 24 July 2014. Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. In addition to upbeat data from overseas, participants received a batch of better than expected earnings, but the market had a difficult time building on its early gain. The S&P 500 closed at an all-time high for the 27th time this year on Thursday, but other U.S. stock-market benchmarks slipped back into the red just ahead of the closing bell.
The Dow Jones Industrial Average finished off 2.83 points at 17,083.80. The Nasdaq Composite ended the day 1.59 points lower at 4,472.11. The S&P 500 closed less than a point higher at 1,987.98, after setting a fresh intraday record.
The main benchmarks traded in a narrow range throughout the session as investors processed a deluge of earnings reports and mixed economic data.
Even with some increased risk appetite in the market place this week, geopolitics is still in the focus of traders and investors.
The much-anticipated HSBC preliminary China Purchasing Managers Index (PMI) rose to 52.0 in July compared to a final reading of 50.7 in June, it was reported Thursday. The July number is a 1.5-year high. A PMI reading above 50.0 suggests expansion. Asian equities were boosted on the upbeat China PMI data. Meantime, the European Union's composite PMI rose to 54.0 in July from 52.8 in June, for the highest reading in over three years. This news helped to boost European stock markets on Thursday. This key economic data coming out of China and the EU suggest the world's major economies are picking up some steam. The PMI data from the EU and China are also bullish underlying factors for the raw commodity sector.
Economic data at Wall Street was limited to initial claims and the New Home Sales report for June. The initial claims level fell to 284,000 from an upwardly revised 303,000 (from 302,000), while the consensus expected an increase to 308,000 The drop in claims brought the overall level to its lowest point since February 2006 and pressured the four-week moving average to its lowest level since May 2006 The Department of Labor said there were no special factors associated with the report, but did note that claims tend to be volatile around this time of the year
New home sales fell 8.1% in June to 406,000 from a downwardly revised 442,000 (from 504,000) in May, while the consensus expected a reading of 475,000 Sales were also revised lower for April (408,000 from 425,000) and March (403,000 from 410,000). Median new home prices increased 5.3% yoy in June to $273,500.
Among major stocks under focus, shares of Facebook jumped 5.2% action after its profit and sales beat expectations. Ford shares rose 0.3% after the car maker beat earnings expectations. General Motors profit sank 80% as the auto maker was hit by recalls. AShares fell 4.5%. Caterpillar shares dropped 3.1% after the maker of manufacturing equipment said sales fell short of expectations in the second quarter, but the company raised its earnings outlook again.
Bullion prices ended the U.S. day session solidly lower on Thursday, 24 July 2014. Gold fell for a third-straight session on Thursday and hit a four-week low to settle below $1,300 for the first time in over a month as investors continued to focus on equities during this mostly upbeat earnings season. Gold for August delivery declined $13.90, or 1.1%, to $1,290.80 an ounce. September silver ended down 58 cents, or 2.8%, to $20.42 an ounce.
Crude-oil futures fell on Thursday, 24 July 2014 but losses were limited by a larger-than-expected drop in U.S. oil stocks and positive China manufacturing data.
On the New York Mercantile Exchange light, sweet crude futures for delivery in September closed at $102.7, down $1.05 from Wednesday.
Tomorrow, the Durable Orders report will be released at 8:30 ET.
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