Intraday Market Update
The S&P 500 futures took a -10 point nosedive in overnight trading after China reported a larger than expected drop in their PMI Manufacturing Index. The futures steadily recovered even in the wake of worse than expected weekly jobless claims numbers released in the pre-market. But stocks took it on the chin after the opening bell when the June ISM manufacturing index was much weaker than expected, hitting its lowest level in six months. The S&P 500 hit a low of 1,010 in late morning trading but has pared most of the losses and is trading at 1,025 around 1:00 PM EST. The Russell 2000 is down -1.20% while the other major indexes are down about -0.50%. The session continues to be volatile.
Economic data around the globe are giving the bears plenty of ammunition. Things started out with China's PMI Index deteriorating much more than expected. The China Stats Bureau said the country's export outlook is "Grim" and that the drop in PMI reflects tightening in government policies and a slow global recovery. Further, they see contraction in the small business output index over the last 2 months, global manufacturing growth is slowing, and raw material inventories demonstrate companies becoming more cautious.
US Weekly Jobless Claims rose +13,000 to 472,000 and last week's figure was upwardly revised by +2,000 to 459,000. Estimates called for claims to decrease to 455,000. The four-week moving average, which smoothes the trend in claims, rose by +3,250 to 466,500. Continuing claims increased by +43,000 to 4,616,000. Estimates called for an increase to 4,550,000.
Disappointing data about pending home sales was also released this morning, tumbling -30% (m/m) in May which was more than double the -14.2% decline estimates called for. Existing home sales were clearly impacted by the end of the government's homebuyer tax credit as sales are listed as pending when contracts are signed. And to qualify for the stimulus contracts needed to be signed by the end of April.
The US ISM Manufacturing Index declined to 56.2 in June from 59.7 in May, which was far worse than estimates calling for a decline to 59.0. A reading greater than 50 signals expansion. The slower rate of growth was driven by a sharp drop in the prices paid component, which fell from 77.5 in May to 57.0 in June.
In equities, Yahoo reported that its Board has approved another $3 billion repurchase plan of its common stock. The new plan comes as it close to ending a previous $3 billion stock buyback program, and it said the repurchases may take place in the open market or in privately negotiated transactions. YHOO is up +1.50%. Constellation Brands is down -1.5% after missing revenue estimates in its Q1 earnings report. After being down more than -2% at the open Apollo Group has recovered and is up over +4.0% after they reported strong Q3 earnings.
The 10-year US Treasury Note printed another new 52-week high in early trading but is near its lows of the day. The US Dollar is under considerable pressure after the string of weak US economic data. Crude Oil, copper, gold and silver are all getting slammed, while natural gas is up +6% after a favorable inventory report.
Core Sector List:
Overall reading: 5 sectors advancing, 11 sectors declining
Strongest Sectors: Retail, Home Construction, Transportation
Weakest Sectors: Gold Miners, Biotechnology, Healthcare
S&P 500 - Daily and 30-minute Intraday Charts:
Dow Jones - Daily and 30-minute Intraday Charts:
NASDAQ - Daily and 30-minute Intraday Charts:
Russell 2000 - Daily and 30-minute Intraday Charts: