While you were sleeping: Solid US GDP, jobs
July 31 (BusinessDesk) - Wall Street was mixed as better-than-expected US economic growth and solid jobs data offset
disappointing results from Procter & Gamble as well as Whole Foods Market.
In late afternoon trading in New York, the Dow Jones Industrial Average was steady, the Standard & Poor’s 500 Index eked out a 0.03 percent advance, while the Nasdaq Composite Index added 0.4 percent.
Gains in shares of Microsoft and those of United Technologies, last up 1.6 percent and 1.5 percent respectively, offset
slides in shares of Procter & Gamble, Boeing and those of UnitedHealth, down 3.9 percent, 0.9 percent and 0.8 percent respectively.
Procter & Gamble offered a disappointing outlook after the company posted a decline in sales in its latest quarter.
A Labor Department report showed jobless claims rose by 12,000 to 267,000 in the period ended July 25, up from from
255,000 the prior week.
Claims “are at extremely low levels, which continues to emphasise that the labour market is improving,” Jennifer Lee, a
senior economist at BMO Capital Markets in Toronto, told Bloomberg before the report. The improvement in the job market
“is enough to keep the economy growing.”
A separate report showed domestic product increased at a 2.3 percent annualised rate in the second quarter, up from a
revised 0.6 percent pace of growth in the first quarter. Initially the economy was reported to have contracted in the
March quarter.
"This was a very constructive report and given the supportive domestic economic backdrop, we expect this positive
momentum in activity to be sustained in the coming months, providing the Fed with the necessary justification to raise
rates this year — perhaps as early as September," Millan Mulraine, deputy chief economist at TD Securities in New York,
told Reuters.
Shares of Whole Foods Market plunged, last 12.6 percent weaker, after the company downgraded its sales forecast.
“Whole Foods was a disaster,” Michael James, managing director of equity trading at Wedbush Securities in Los Angeles,
told Bloomberg.
Shares of Facebook slid, last down 1.6 percent, after the company failed to meet some expectations.
"I think that the underlying expectation was that revenue could be a bit stronger than that, especially given that we
have seen quite a lot of strength at Google and even Twitter's ad revenue was better than anticipated," Atlantic
Equities analyst James Cordwell told Reuters.
With 64 percent of S 500 companies having reported second-quarter results, analysts expect overall earnings to edge up 1 percent and revenue
to decline 3.6 percent, according to Thomson Reuters data.
In Europe, the Stoxx 600 Index ended the day with 0.6 percent increase from the previous close. Germany’s DAX rose 0.4
percent, while both France’s CAC 40 and the UK’s FTSE 100 Index gained 0.6 percent.
Shares of Royal Dutch Shell rallied 4.9 percent after the company said it plans to slash 6,500 jobs and sell a stake in
a Japanese refiner, while shares of Nokia Oyj soared 7.5 percent on better-than-expected earnings.
(BusinessDesk)