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9:45AM Wall Street opened lower on weak durable goods orders and nervousness ahead of Fed’s decision on rates.[/R]
Wall Street opened in the negative, pressured by much weaker-than-expected durable goods orders and cautiousness ahead of the Fed Reserve''s two-day meeting on interest rates. The Commerce Department reported that durable goods orders in May dropped by 2.8%, a steeper drop than the decline of 1.7%, anticipated by investors. The weak data sparked concerns that the U.S. economy will not recover from its recent slowdown.
The downward trend was bucked by positive earnings releases, indicating stronger corporate profit growth in Q2. Conagra (
CAG: chart) added 1.7% after reporting a Q4 profit of $192 million, or 39 cents per share, vs. a profit of $59.2 million, or 11 cents, a year ago. Quarterly results beat estimates of earnings of 31 cents per share on revenue of $2.83 billion.
Among other earnings-related movers, Nike Inc. (
NKE: chart) posted 325 profit increase in the most recent quarter compared to the year-ago period. Nike rose 4%. Among tech stocks, Oracle Corp. (
ORCL: chart) reported 23% profit rise and said that said sales in the current quarter may rise more than expected. Shares gained 2%.
The Dow Jones industrial average fell 56.99, or 0.43%, to 13,280.67. The Standard & Poor's 500 index fell 7.77, or 0.52%, to 1,485.12, and the Nasdaq composite index fell 5.19, or 0.20%, to 2,568.97. Treasury bonds rose after the weak durable goods data drove investors to the safe-haven assets. The 10-year Treasury note's yield fell to 5.04% from 5.09% late Tuesday.
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9:30AM The FTSE 100 is lower in mid-morning trade Wednesday.[/R]
The UK market is down on Wednesday. In late morning trade, the
FTSE 100 lost 32.2 points to 6,527.1.
Political news
Tony Blair stepped down as prime minister today to make room for Gordon Brown, Chancellor of the Exchequer in Mr. Blair’s cabinet, to head the UK Government.
Advancers
Bus and train group Stagecoach was one of the very few advancers in the morning, reporting a big rise in full year profits Wednesday tracking strong growth in its bus and rail operations in the UK and North America. The stock rose 5.3%.
Hikma Pharmaceuticals surged after saying that first half revenues are expected to increase about 40%. The shares of the company advanced 5.4%.
Decliners
Northern Rock, a mortgage bank, plummeted 9.6% as it downgraded its profit guidance quoting a rise in funding costs. The bank added that annual profits would grow by 15 %, less than the 17 % anticipated by the market.
The lender was also responsible for the sharp decline in the mid-cap index, where Paragon Group, a specialist mortage lender, fell 6.4% and Bradford & Bingley lost 3.7%.
Other banks followed suit and plunged. Alliance & Leicester was off 2.9%, HBOS declined 2.3% and Lloyds TSB was down 2.1%.
Seven FTSE 100 constituents were trading without further rights to their latest dividend payment. Among them were United Utilities which lost 4 %, Tate & Lyle falling 2.7 % to 568p and Yell Group retreating 2.8 %.
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9:00AM Market futures declined amid weak durable goods orders.[/R]
