Wall Street takes a break
August 4, 2010
After finishing sharply higher Monday, the markets take a breather on Tuesday. A few minutes after opening, the Dow Jones was down 0.34% at 10,638 points, the Nasdaq lost 0.30% to 2289 points while the S & P LAHC 0.33% to 1122 points.
Markets were waiting for signs of solid U.S. recovery now but they were not reassured. The Commerce Department announced that consumer spending of U.S. households remained unchanged in June In addition, the consumption figures in May were revised downward: they no longer show a rise of 0.1%, against 0.2% previously announced. Economists had forecast an average increase of 0.1% of consumer spending in June
Household income is also unchanged in June at 0.1%, while economists had estimated the increase at 0.1%.The savings rate has reached 6.4%, up a tenth of a point, its highest level since June 2009.
Prices are down 0.1% in June and inflation falls to 1.4% a year.
Furthermore, he promises the sales on the U.S. housing market suffered an unexpected drop in June The index of the federation of Realtors NAR is thus fell to a new record low 75.7. He had fallen from 29.9% in May after the expiration of a tax credit for first-time buyers. In one year, the show promises to sell a drop in June from 18.6%.
In addition, industrial orders fell 1.2% in June, while the market was expecting a decline of 0.5% only. In May, these orders had fallen 1.8% (revised from -1.4%), posting a second consecutive month of decline.
Chimical Dow and Procter fall
On the corporate side, Dow Chemical (-7.52% to 26.20 dollars) and Procter & Gamble (-3.53% to 59.87 dollars) derive the score down. Both companies have disappointed the markets by their results published before the market opens. The first was reported earnings below expectations in the second quarter to $ 566 million, or 50 cents per share, after posting a loss of $ 486 million (47 cents per share) the previous year. Excluding items, earnings totaled 54 cents per share against 56 cents expected by analysts. The second has announced a profit drop of 12% in the fourth quarter of its fiscal year lagged below expectations at 2.185 billion dollars. The turnover is also lower than expected, growing by 5% to 18.926 billion dollars against 19.1 billion dollars expected.
In contrast, Pfizer (3.88% to 16.08 dollars) flies. The pharmaceutical giant reported earnings up 9% year on year to 2.475 billion dollars against 2.261 billion a year earlier. Earnings per share excluding exceptional items stood at 62 cents while analysts expected 52 cents on average.
RIM (+0.35% to 57.18 dollars) this Tuesday its new BlackBerry. The group gave its first agreement with the Indian authorities for the sharing of encrypted data in transit on the servers of its BlackBerry smartphones, the newspaper Economic Times.
Morgan Stanley (-0.57% to 27.55 dollars) will be closely watched. The U.S. bank would have in fact decided to split the fund FrontPoint risk investments, acquired in 2006 by U.S. TV network CNBC that the deal is completed by three months.This split would allow Morgan Stanley to comply with new requirements of the Dodd-Frank legislation on financial regulation, which limits the bank's own brokerage and speculative positions.
Sanofi-Aventis has sent the U.S. biotech group Genzyme (-0.14% to 70.26 U.S. dollars) which gained 1.15% to 70.36 dollars on Monday night) a letter citing his interest in American society, said Monday a source close to the deal, adding that the two companies were discussing the offer.
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