Market Commentary and Intraday News
Stocks waver, with hard-to-read signs on economy
285 days ago
By CHRISTINA REXRODE
AP Business Writer
(AP:NEW YORK) The stock market is wavering between small gains and losses early Thursday as investors are pulled between positive news about the U.S. economy and signs of trouble in China and Europe.
The Dow Jones industrial average was up three points at 13,171 after the first half-hour of trading. The Standard & Poor's 500 rose less than a point to 1,402 and the Nasdaq composite index edged up five to 3,016.
In the U.S., the government reported that the trade deficit fell to the lowest level in 18 months. The trade deficit is the gap between how much the U.S. imports and the smaller amount that it exports. A lower deficit is generally considered good for the economy. In June, the U.S. paid less for the oil it brought in and enjoyed higher sales of its autos, pharmaceuticals and industrial machinery overseas.
But a troubling trend was buried in the report: Exports to China dropped more than 4 percent. That's a concern because China, the world's second-largest economy, has been a major driver of the global economy throughout the recession and its aftermath, even as other countries stumbled. And U.S. exports weren't the only sign that China can't keep greasing the skids forever. Separately, China reported that growth slowed in auto sales and factory output.
China's government is also worried about the situation. It has cut interest rates twice since the start of June and is pumping money into the country's economy through more spending on building public works.
The U.S. also reported weekly jobless claims, but the results weren't much to hang onto. The number of Americans applying for unemployment benefits fell slightly last week. However the average for the past four weeks, a more reliable and less volatile indicator, rose slightly.
The second-quarter corporate earnings season, when U.S. companies report how much money they lost or made, is winding down. Wendy's rose 8 cents to $4.62 after reporting higher revenue. Tim Hortons, the Canadian coffee-and-doughnut chain, fell despite reporter higher revenue and net income. In the morning, it was down $1.18 to $51.40.
Online brokerage E-Trade jumped 5 percent after unexpectedly firing its CEO. The company's reasons weren't immediately clear, but its stock rose 43 cents to $8.45.
Ominous signs out of Europe continued to hang over the market: The chairman of Cyprus's Laiki Bank, which the government has propped up, stepped down after the country's central bank governor asked him to.
Germany's Commerzbank predicted lower profits for the rest of the year, saying its customers are too nervous to invest or take out loans. And Greece reported that unemployment soared to 23 percent in May from 17 percent in the same month a year ago. Among people under 25 years old, 55 percent are out of work.
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