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Sunday July 12, 2009 7:00 AM ET
SmartMoney
Published September 3, 2008 4:16 PM  |  A A A
Breaking News by Mark Glassman (Author Archive)

Fed, Data Leave Stocks Mixed

News at a Glance



  • Flat Finish: Major indexes finish the day mixed.


  • Manufacturing Strength: Factory orders top consensus.


  • Still Slipping: Oil prices dip to near $109 a barrel.


  • Wings Clipped: Ospraie hedge fund to shut down.


    • The Lowdown



    The volatilty continues on Wall Street.

    Stocks finished an up-and-down session mixed on Wednesday as traders wrestled with another subpar Beige Book, some suprising data out of the manufacturing sector and the latest hedge fund collapse. The Dow Jones Industrial Average climbed 16 points to 11533. The Nasdaq dropped 16 to 2334, and the S&P 500 slipped 3 to 1275.

    Techs were the big losers on the day. Chip makers like Intel (INTC) and Qualcomm (QCOM) posted substantial losses on concern over demand for new hardware. IBM (IBM) also took a step backward.

    Capital goods, utilities, materials and energy alost showed weakness -- even after the latest factory orders report suggested some unexpected strength from industrials. Orders climbed 1.3% last month, well above economists' projections. Still, miners lost ground as commodities prices declined.

    Energy stocks sagged. Oil prices continued their slide as oil companies expected to report only light damage from Hurricane Gustav, worry grew over global demand and the dollar gained ground. By 3:53 p.m., crude had lost 23 cents on the day at $109.48 a barrel.

    Automakers performed well despite dreadful numbers last month. Ford (F) and General Motors (GM) each saw sharp sales declines in August.

    The greenback continued its comeback. The dollar hit its highest point in 11 months against a basket of foreign currencies before pulling back a bit. The euro declined after a report showing the economy contracted in the euro zone by 0.2% during the second quarter, the first step backward since 1995, when data tracking began.

    In economic news, the Fed's Beige Book report on local economic conditions portrayed little in the way of progress among the troubled real estate and retail sectors. The Fed also reported that most districts remained concerned about upward price pressures.

    In finance, another hedge fund is set to close. Ospraie Management will shut down after absorbing heavy losses from the recent decline in the commodities market. Lehman Brothers (LEH) acquired a 20% stake in the fund three years ago. Still, the broader sector posted gains as the dollar rebounded.


    Corporate News



  • Lehman Brothers (LEH) received an offer from Korea Development Bank to sell as much as 25% of itself for $5.3 billion, Reuters reported, citing the Korean newspaper Daily Chosun Ilbo. The paper also listed HSBC (HBC) among a list of potential buyers.


  • Coca-Cola (KO) has offered to buy China Huiyuan Juice in a deal worth $2.5 billion, the firm said. Coke said it would preserve the branding of China's top juice maker if the deal is completed. The acquisition would also be Coke's largest in China since the firm arrived there nearly 30 years ago.


  • Staples (SPLS) posted a 16% drop in net income on a decline in same-store sales. Staples earned $150.2 million, or 21 cents a share, down from $178.8 million, or 25 cents a share, the firm said in a statement in which chairman and chief executive Ron Sargent referenced "challenging economic times." The firm met analysts' estimates and maintained its earlier guidance for the rest of the year.


    • The Economy



  • Factory orders, a measure of demand, rose 1.3% in July, up from a revised 2.1% increase in June, the Commerce Department said. Economists had expected orders to have climbed 0.4%. REPORT


  • Crude inventories fell by 0.1 million barrels last week, leaving them in the middle of the average range for this point in the year, the Energy Department said. REPORT


  • The Federal Reserve's Beige Book report on local economic conditions revealed weakness in local financial institutions as they cope with the credit crisis. The housing, retail and manufacturing sectors leaned negative in most districts. Inflation persisted, though some districts cited lower commodities prices. REPORT


    • ReadMe



  • Forbes on natural gas: The industry makes its case at the Republican National Convention. STORY


  • Fortune on trading Sarah Palin: Intrade allows users to bet on whether John McCain will drop Palin from his ticket. STORY


  • The Los Angeles Times on Google: The paper reviews Google Chrome, the firm's new browser. STORY


    • WatchMe



  • Reuters on McCainomics (perhaps best pronounced "meconomics"): Doug Holtz-Eakin, John McCain's top economic advisor, discusses the presumptive presidential nominee's policy stances on energy, trade and financial regulation. VIDEO


  • Bloomberg on oil: Marc Faber, publisher of the "Gloom, Boom & Doom Report" newsletter, says the recent decline in energy prices is indicative of a slumping economy. VIDEO


  • Shows with the word 'America' in their titles: The major networks may have spurned the political conventions, but don't call them unpatriotic. While CNN, CSPAN, MSNBC, PBS broadcast live from the Republican National Convention, CBS, NBC, ABC Family and CW will air episodes of "Greatest American Dog," "America's Got Talent," "America's Funniest Home Videos," and "America's Next Top Model," respectively. NBC, CBS, ABC Family, CW, 8 p.m.


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