US open: PIMCO highlights potential sources of risk for equities

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LONDON (ShareCast) - - PIMCO's El Erian calls attention to risks for stock market
- Stronger than expected existing home sales
- Negative technical signals for NYSE in early August

Dow Jones (DJI: ^DJI - news) : -0.23%
Nasdaq Composite: 0.03%
S&P 500: -0.20%

The main US equity gauges are now trading in an ever so slightly mixed manner. Of interest, some market commentary seems to be highlighting the negative aspects of the current market backdrop.

In that regard, writing in today's Financial Times bond-fund PIMCO's Chief Executive Mohamed El-Erian warns investors about some of the risks which markets face in the most extreme short-term.

These would be: the upcoming FOMC meeting, a polarised US Congress [over the fiscal cliff], elections in Germany, Eurozone uncertainty, policy doubts in Japan, tensions in emerging markets and unrest in the Middle East.

FOMC minutes release ahead

That comes ahead of the release - this evening, after the close of trading - of the minutes of the latest meeting of the Federal Open Market Committee. Of note, some economists see the "risk" of a, to a certain extent, dovish set of minutes.

According to the latest Bloomberg poll 65% of economists expect that America's central bank will go ahead and initiate the tapering of its asset purchase programme come September, versus the 50% who saw this same possibility one month ago.

Barclays Research, for one, believes the minutes will show that the Committee stands ready to reduce the pace of asset purchases in September. However, the FOMC may "push back" on market pricing of the first rate hike. Thus, the committee may have discussed lowering the unemployment threshold on policy rate hikes, although no such move is expected in the near future.

Retailers mixed

Back on the company front, retailer Target (NYSE: TGT - news) is moving lower after announcing lower than expected quarterly profits and cutting its guidance. American Eagle Outfitters (NYSE: AEO - news) missed analysts' quarterly sales targets.

Lowe's Cos., on the other hand, managed to handily beat estimates and the company raised its full-year profit forecasts.

Food giant JM Smucker is edging lower following the announcement of $1.19 per share in fiscal first quarter earnings, slightly below the $1.20 projected by analysts.

Technology heavyweight Hewlett Packard (NYSE: HPQ - news) will release its latest quarterly results after the 'closing bell,' tonight.

From a technical backdrop, Marketwatch.com's Mark Hulbert is out today calling attention to the possibly worrying fact that the advance-decline ratio on the NYSE failed to confirm the new highs in the benchmarks indices in early August.

Light economic data calendar

US existing home sales rose to an annualised rate of 5.39m in July, versus 5.08m a month before - according to the National Association of Realtors [NAR] and consensus forecasts for a reading of 5.15m.

Interestingly the NAR's Chief Economist Lawrence Yun attributed part of the rise to increased mortgage rates, the highest in two years, which have pushed some buyers "off the sidelines." Yun also highlights the still tight inventory situation.

Mortgage applications dropped by 4.6% week-on-week in the seven days ended on August 16th, figures from the Mortgage Bankers' Association [MBA] show.

Energy futures dragged lower by Libya reports

Front month West Texas crude futures are now lower by 0.62% to the 104.46 dollar per barrel mark on the NYMEX. Reports that two Libyan export terminals are ready to return to activity are weighing on the energy complex.

10 year US Treasury yields are now rising by 3 basis points to the 2.84%.

S&P 500 - Risers
Lowe's Companies Inc. (LOW) $46.27 +4.97%
Edwards Lifesciences Corp (NYSE: EW - news) . (EW) $72.35 +2.68%
NASDAQ OMX Group Inc. (NDAQ) $31.95 +2.34%
FirstEnergy Corp (NYSE: FE - news) . (FE) $37.95 +1.93%
Garmin Ltd (NasdaqGS: GRMN - news) . (GRMN) $39.10 +1.68%
Salesforce.Com Inc. (CRM) $44.05 +1.52%
Quest Diagnostics (NYSE: DGX - news) (DGX) $59.64 +1.50%
CF Industries Holdings Inc. (CF) $189.90 +1.07%
Apple Inc (NasdaqGS: AAPL - news) . (AAPL) $506.09 +1.00%
Dollar General Corp (DG) $53.90 +0.99%

S&P 500 - Fallers
Staples Inc (NasdaqGS: SPLS - news) . (SPLS) $14.57 -13.48%
J.C. Penney Co. Inc. (JCP (Taiwan OTC: 4747.TWO - news) ) $13.60 -2.96%
Target Corp. (TGT) $66.27 -2.47%
Analog Devices Inc (NasdaqGS: ADI - news) . (ADI) $46.80 -2.19%
Equity Residential (NYSE: EQR - news) (EQR) $50.49 -1.62%
Newmont Mining Corp. (NEM) $32.30 -1.55%
DIRECTV (NasdaqGS: DTV - news) (DTV) $57.76 -1.50%
Abercrombie & Fitch Co (NYSE: ANF - news) . (ANF) $47.77 -1.50%
Mosaic Company (MOS) $41.38 -1.43%
PG&E Corp (NYSE: PCG - news) . (PCG) $42.20 -1.33%

Dow Jones I.A - Risers
Cisco Systems Inc (NasdaqGS: CSCO - news) . (CSCO) $24.48 +0.64%
Microsoft Corp. (MSFT) $31.78 +0.51%
Merck & Co. Inc (Xetra: A0YD8Q - news) . (MRK) $47.76 +0.42%
International Business Machines Corp. (IBM (NYSE: IBM - news) ) $185.22 +0.36%
Home Depot Inc. (HD) $74.52 +0.31%
Procter & Gamble Co. (PG) $79.75 +0.28%
Exxon Mobil Corp. (XOM) $87.04 +0.24%
Hewlett-Packard Co. (HPQ) $25.90 +0.23%
Wal-Mart Stores Inc. (WMT) $73.35 +0.16%
Boeing Co (NYSE: BA - news) . (BA) $104.75 +0.12%

Dow Jones I.A - Fallers
Travelers Company Inc. (TRV) $79.71 -0.70%
3M Co. (MMM) $114.66 -0.66%
Verizon Communications Inc. (VZ) $47.64 -0.56%
Walt Disney Co. (DIS) $61.58 -0.49%
American Express Co. (AXP) $73.91 -0.48%
Unitedhealth Group Inc. (UNH) $72.11 -0.48%
Caterpillar Inc (NYSE: CAT - news) . (CAT (Taiwan OTC: 4990.TWO - news) ) $83.61 -0.30%
AT&T Inc. (T) $33.77 -0.30%
Intel Corp. (INTC) $22.47 -0.26%
Pfizer Inc (NYSE: PFE - news) . (PFE) $28.47 -0.21%

Nasdaq 100 - Risers
Garmin Ltd. (GRMN) $39.10 +1.68%
Vertex Pharmaceuticals Inc. (VRTX) $77.39 +1.10%
Facebook Inc (NasdaqGS: FB - news) . (FB) $38.81 +1.04%
Apple Inc. (AAPL) $506.09 +1.00%
Google Inc (NasdaqGS: GOOG - news) . (GOOG) $873.96 +0.99%
Western Digital Corp. (WDC) $65.61 +0.94%
Autodesk Inc (NasdaqGS: ADSK - news) . (ADSK) $35.99 +0.84%
Whole Foods Market Inc (NasdaqGS: WFM - news) . (WFM) $52.83 +0.75%
Monster Beverage Corp (MNST) $59.67 +0.73%
Vodafone Group Plc ADS (VOD) $30.03 +0.70%

Nasdaq 100 - Fallers
Staples Inc. (SPLS) $14.57 -13.48%
Analog Devices Inc. (ADI) $46.80 -2.19%
Randgold Resources Ltd. Ads (GOLD) $78.72 -2.06%
DIRECTV (DTV) $57.76 -1.50%
Texas Instruments Inc (NasdaqGS: TXN - news) (TXN) $38.32 -1.11%
Comcast Corp. (CMCSA) $42.24 -1.05%
Linear Technology Corp. (LLTC) $38.91 -0.97%
Avago Technologies Ltd. (AVGO) $36.46 -0.90%
Twenty-First Century Fox Inc Class A (NWSA) $15.58 -0.76%
Expeditors International Of Washington Inc (NasdaqGS: EXPD - news) . (EXPD) $40.24 -0.75%

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