August 13, 2013: U.S. equity markets opened slightly higher this morning following a report on retail sales from the Census Bureau that was stronger than expected. Stocks turned south quickly though, as Treasury yields climbed and the market looked at the strong sales report as a further indication that the Fed would begin tapering its stimulus program sooner rather than later. In Europe, eurozone industrial production rose 0.7% in July, a little lower than expectations, and the U.K.’s CPI came in as estimated at 2.8%. In Asia, Japanese machinery orders fell 2.7% in the month, much less than expected. Shares turned higher in the afternoon after Atlanta Fed President Dennis Lockhart said that the central bank won’t have enough data to make a decision in September on tapering its bond-buying program.
The U.S. dollar index is trading higher today, now up 0.54% at 81.7720. The GSCI commodity index is up 4.2% at 638.88. WTI crude oil closed up 0.7% today, at $106.83 a barre. Brent crude trades up 0.8% at $109.88 a barrel. Natural gas is down 0.8% today at about $3.28 per million BTUs. Gold for December delivery settled down 1% today at $1,320.50 an ounce.
The unofficial closing bells put the DJIA up more than 31 points to 15,451.01 (0.20%), the NASDAQ rose more than 14 points (0.39%) to 3,684.44, and the S&P 500 rose 0.28% or nearly 5 points to 1,694.16.
There were a several analyst upgrades and downgrades today, including:
- Xerox Corp. (XRX) raised to ‘buy’ at Citigroup;
- Marvell Technologies (MRVL) added to ‘top pick’ list at RBC Capital Markets;
- Microsoft Corp. (MSFT) cut to ‘hold’ at Stifel Nicolaus;
- First Solar Inc. (FSLR) maintained at ‘neutral’ at Credit Suisse ; and
- Rockwell Collins Inc. (COL) raised to ‘buy’ with a price target of $88 at Sterne Agee.
Earnings reports since markets closed last night resulted in some prices move today:
- American Apparel Inc. (APP) is down 8% at $1.83;
- Iamgold Corp. (IAG) is up 2.4% at $5.47;
- Sina Corp. (SINA) is up 4% at $83.59 after posting a new 52-week high of $86.00; and
- First Majestic Silver Corp. (AG) is down 1.3% at $13.13 on a weak earnings report.
Before markets open tomorrow morning we are scheduled to hear earnings results from Dillards Inc. (DDS), Brocade Communications Systems Inc. (BRCD), Cree Inc. (CREE), The ExOne Co. (XONE), JDS Uniphase Corp. (JDSU), Real Goods Solar Inc. (RSOL), SeaWorld Entertainment Inc. (SEAS), JinkoSolar Holding Co. Ltd. (JKS) and Macy’s Inc. (NYSE: M).
Some standouts among heavily traded stocks today include:
US Airways Group Inc. (LCC) is down 11.9% at $16.58. The airlines got hit hard after the U.S. Justice Department blocked its merger with American Airlines.
BlackBerry Ltd. (BBRY) is up 4.1% at $11.23. The smartphone maker jumped yesterday on news that it was exploring strategic alternatives; today’s rise could be due to the resignation a company board member who is also the founder of one of BlackBerry’s largest investor, and a prime candidate to take the company private.
Osiris Therapeutics Inc. (OSIR) is up 127.5% at $24.25 after posting a new 52-week high of $24.75 earlier today. The biotechnology company got a big lift after a study found its stem cell-based wound treatment for certain diabetic foot ulcers performed three times better than the standard therapy.
Stay tuned for Wednesday. St. Louis Fed President James Bullard is giving a speech. We have noted the following events on the schedule (all times Eastern):
- 7:00 a.m. - MBA purchase applications
- 8:30 a.m. - Producer price index
- 10:30 a.m. - EIA weekly petroleum status report
- 2:00 p.m. - Treasury budget
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