STOCKS FALL: Here's What You Need To Know
REUTERS/Ivan Alvarado
A model of a power shovel is seen as visitors climb on a mining truck as they attend "Expomin 2012", a Chilean mining fair in Santiago.
Bad news out of China was offset by good news out of Europe. Meanwhile, the U.S. continues to hum along.
First, the scoreboard:
Dow: 15,542.2, -25.5, -0.1 %
S&P 500: 1,685.9, -6.4, -0.3%
NASDAQ: 3,579.6, +0.3, +0.0%
And now, the top stories:
Overnight, we learned that the deceleration of China's manufacturing sector continued to get worse in July. The Flash PMI fell to an 11-month low of 47.7, which was worse than the 48.2 reading expected by economists. This fanned fears that China's economy was headed for a hard landing, which would be bad news for China's big trading partners.
On the brighter side, the economic bleeding in Europe seems to have stopped. The Eurozone composite Flash PMI jumped to an 18-month high of 50.4 in July, up from 48.7 a month ago.
U.S. Flash PMI advanced to 53.2 from 51.9 in July. Employment and new orders were on the rise.
New home sales surged 8.3% in June to an annualized pace of 497,000 units. This was well ahead of the 484,000 expected by economists.
Global construction and mining machinery maker Caterpillar announced its Q2 financial results, and the numbers weren't good for anyone. Earnings missed expectations by a wide margin and the stock price fell over 2%.
Even worse, Caterpillar downgraded its outlook for global growth. "World economic growth slowed in the first half of the year, and we are revising our growth estimates downwards," they said. "Although we expect some improvement in the second half, the improvement will be less than previously expected. Currently, we expect that world economic growth for 2013 will be a little over 2 percent, slightly slower than in 2012."
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