Traders gather for the IPO of Phillips 66 Partners LP, on the floor at the New York Stock Exchange, July 23, 2013. Phillips 66 Partners LP, a limited partnership formed earlier this year by Phillips 66, opened at $23.00 a share.
Markets reacted favorably to a wave of news, but the rally couldn't hang on.
First, the scoreboard:
- Dow: 15,499.5, -21.0, -0.1 %
- S&P 500: 1,685.7, -0.2, -0.0%
- NASDAQ: 3,626.3, +9.9, +0.2%
And now, the top stories:
- According to the ADP's National Employment Report, private sector companies added 200,000 jobs in July. This was stronger than the 180,000 expected by economists. Additionally, the June payrolls estimate was revised up to 198,000 from an earlier reading of 188,000. "Job growth remains remarkably stable," said Moody's Mark Zandi. "Businesses are adding to payrolls in most industries and across all company sizes. The job market has admirably weathered the fiscal headwinds, tax increases and government spending cuts. This bodes well for the next year when those headwinds are set to fade.”
- The Bureau of Economic Analysis published its first estimate of Q2 GDP, and it was strong. The U.S. economy grew at a 1.7% annualized rate, which was much higher than the 1.0% expected by economists. Personal consumption grew at a 1.8% rate compared to economists expectation for a 1.6% rate. "Second quarter growth was supported by a 1.8% gain in consumption, down only slightly from a 2.3% gain in the first quarter," said Capital Economics' Paul Ashworth."Together, those increases suggest that households have coped well with higher taxes."
- It is, however, important to note that the Q1 growth rate was revised to down to 1.1%. "In light of real GDP growing by only 1.4% at an annualized rate in the first half of 2013, it is unlikely that growth in the second half will be strong enough for the Fed's 2.3 to 2.6% real GDP growth projection to be realized," said Goldman Sachs' Jan Hatzius. "As a result, we would expect a downward revision to the Fed's 2013 growth forecast in the September Summary of Economic Projections."
- But today's report also included substantial revisions that added $559.8 billion of GDP in 2012.
- The July FOMC statement showed no new change to policy. But the committee recognized "that inflation persistently below its 2 percent objective could pose risks to economic performance."
- Andrew Wilkinson at Miller Tabak said that with today's statement "it appears that the central bank has edged ever so slightly away from reducing bond purchases."
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