July 31, 2013: U.S. equity markets opened higher this morning as traders and investors this afternoon’s announcement from the FOMC. In Europe, the unemployment rate in the eurozone was unchanged at 12.1%, and Germany’s retail sales fell 1.5% in July. In Asia, Japan’s manufacturing PMI fell to 50.7. In the U.S., the ADP employment report was very strong and preliminary GDP growth came in above expectations. The FOMC announcement was kind of an anticlimax, but all indexes rose following the show until the last half hour of trading.
The U.S. dollar index is trading lower today, now down 0.26% at 81.6130. The GSCI commodity index is down 0.7% at 632.09. WTI crude oil closed up 1.9% today, at $105.03 a barrel after the EIA inventory report>. Brent crude trades up 0.8% at $107.71 a barrel. Natural gas is up 0.4% today at about $3.45 per million BTUs. Gold for August delivery settled down 0.9% today at $1,313.00 an ounce to end the month up 7.3%.
The unofficial closing bells put the DJIA down about 21 points to 15,499.54 (-0.14%), the NASDAQ rose nearly 10 points (0.27%) to 3,626.37, and the S&P 500 fell -0.01% or less than 1 point to 1,685.73.
There were a several analyst upgrades and downgrades today, including:
- SanDisk Corp. (SNDK) cut to ‘underperform’ at BMO Capital Markets;
- Nvidia Corp. (NVDA) cut to ‘market perform’ at Wells Fargo;
- Alcatel-Lucent SA (ALU) raised to ‘buy’ at Nomura;
- Sirius XM Radio Inc. (SIRI) started as ‘overweight’ with a $4.50 price target at Barclays; and
- Chemical & Mining Co. of Chile Inc. (SQM) cut to ‘neutral’ at both Citigroup and Credit Suisse following yesterday’s bloodbath in potash stocks.
Earnings reports since markets closed last night resulted in some prices move today:
- Amgen Inc. (AMGN) is down 2.5% at $108.46;
- IAC/InterActiveCorp (IACI) is down 3.3% at $50.86;
- Take-Two Interactive Software Inc. (TTWO) is up 3% at $17.50 after posting a new 52-week high of 17.84 earlier today;
- Burger King Worldwide Inc. (BKW) is down 0.9% at $19.36;
- Hess Corp. (HES) is up 2% at $74.63 after posting a new 52-week high of $75.80 earlier today;
- Phillips 66 (PSX) is up 5.4% at $61.60 after weak earnings; and
- Weatherford International Inc. (WFT) is up 1.7% at $14.01.
Before markets open tomorrow morning we are scheduled to hear earnings results from Allstate Corp. (ALL), Boston Beer Co. Inc. (SAM), CBS Corp. (CBS), Kinross Gold Corp. (KGC), Pioneer Natural Resources Co. (PXD), Sturm Ruger & Company Inc. (RGR), Whole Foods Market Inc. (WFM), Avon Products Inc. (AVP), Barrick Gold Corp. (ABX), Chesapeake Energy Corp. (CHK), Exxon Mobil Corp. (XOM), Procter & Gamble Co. (PG), and Time Warner Cable Inc. (TWC).
Some standouts among heavily traded stocks today include:
Potash Corp. of Saskatchewan Inc. (POT) is down another 8.2% today at $29.05. The Canadian fertilizer maker was hit even harder yesterday following a breakup of a potash cartel in eastern Europe.
Meru Networks Inc. (MERU) is down 27.3% at $3.60. The networking company posted weak revenues last night.
Green Dot Corp. (GDOT) is up 15.8% at $23.28. The bank holding company posted better than expected earnings and revenues last night.
Stay tuned for Thursday. Automakers will be reporting July sales throughout the day. We have also noted the following events on the schedule (all times Eastern):
- 7:30 a.m. - Challenger job cut report
- 8:30 a.m. - New claims for unemployment benefits
- 8:58 a.m. - Flash manufacturing PMI report
- 10:00 a.m. - ISM manufacturing PMI report
- 10:00 a.m. - Construction spending
- 10:30 a.m. - EIA weekly natural gas storage report
- 1:00 p.m. - Gallup US payroll-to-population report
- 4:30 p.m. - Fed balance sheet and money supply
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