WARSAW, Poland (AP) — Avoiding a last-minute breakdown, annual U.N. climate talks have limped forward with a modest set of decisions meant to pave the way for a new pact to fight global warming.
Science Headlines
The U.S. stock market rose again in a quite trading session on Monday. Volatility was limited on the day as investors gear up for earnings season.
Citigroup (C) shares rose around 2 percent after the company released its quarterly results prior to the opening bell. Although the gains were modest across the board, the recent rally remains firmly intact as the S&P 500 closed at another new all-time high.
On the economic front, retail sales data disappointed, but this didn’t prevent investors from continuing to chase the market higher to start the trading week.
Major Averages
The Dow Jones Industrial Average climbed 20 points, or 0.13 percent, to 15,484.
The S&P 500 rose a little more than 2 points, or 0.14 percent, to 1,683.
The Nasdaq gained better than 7 points, or 0.21 percent, to close at 3,607.
Retail Sales
Retail sales rose 0.4 percent for June. This compared to an increase of 0.5 percent for May and consensus estimates calling for an increase of 0.7 percent.
Excluding the auto sector, retail sales were flat for the month compared to an increase of 0.3 percent for May. This came in below consensus estimates calling for a rise of 0.4 percent.
Business Inventories
Business inventories increased 0.1 percent for May after increasing 0.3 percent in April. This compared to consensus estimates which expected inventories to fall 0.1 percent.
Commodities
Energy prices rose on Monday to start the trading week. Late in the afternoon, NYMEX crude futures were up 0.40 percent to $ 106.37. Brent crude contracts rose 0.24 percent to $ 109.07. Natural gas futures were last trading up 0.71 percent to $ 3.67.
Precious metals also recorded moderate gains on the day. COMEX gold futures were last up 0.47 percent to $ 1,283.60 while silver contracts rose 0.67 percent to $ 19.93. Copper traded down around 0.21 percent on the day to $ 3.1485.
In the grains complex, both corn and wheat were lower. Corn futures lost around 1.13 percent while wheat fell 1.69 percent. Movers in soft commodities included coffee, which traded up more than 3 percent, and rubber, which lost a little more than 1 percent.
Bonds
Bonds were slightly higher on Monday. Near the close of trade, the iShares Barclays 20+ Year Treasury Bond ETF (TLT) was up around 0.32 percent to $ 108.07.
Yields were as follows on Monday afternoon: The 2-Year Note was yielding 0.33 percent while the 5-Year Note yield was 1.39 percent. The yield on the 10-Year Note was 2.55 percent and the 30-Year Bond yield was 3.61 percent.
Currencies
The U.S. Dollar was largely unchanged on the session. Near the close, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.04 percent to $ 22.48.
The closely watched EUR/USD pair was last trading up 0.04 percent to $ 1.3066. Other movers included the USD/JPY, which rose 0.48 percent, and the AUD/USD, which added 0.43 percent on the session.
Volatility and Volume
The VIX recorded a small loss on the day as the market continued to touch new highs. The widely watched barometer of volatility expectations fell 0.94 percent to 13.71.
Volume was extremely light on the session. Only around 59 million SPDR S&P 500 ETF (SPY) shares traded hands compared to a 3-month daily average of 144.4 million.
Stock Movers
Leap Wireless (LEAP) rose better than 113 percent on Monday after the company agreed to be acquired for $ 1.19 billion cash.
Power Integrations (POWI) rose better than 11 percent on the session after the company raised its outlook for second-quarter revenue and gross margin.
Forest Oil (FST) had risen a little less than 5 percent on Monday after the company began a process to sell its oil and gas assets in the Texas Panhandle.
Inteliquent (IQNT) climbed more than 38 percent on the session after the company boosted its full-year guidance.
Navistar International (NAV) rose around 10 percent on the session after the company agreed to let shareholders Carl Icahn and Mark Rachesky nominate two director’s each to the truckmaker’s board.
Shares of Ingredion (INGR) lost 10 percent on Monday after the company provided a profit warning. Ingredion said that weakening economic conditions in South America would weigh on profits and said that Q2 earnings could be up to 14 percent below the company’s previous guidance. The maker of starches and sweeteners also provided full-year guidance which was below analysts’ estimates.
OCZ Technology (OCZ) lost more than 5 percent on the session after the company forecast a 50 percent drop in Q1 revenue.
Shares of Cash America International (CSH) fell more than 6 percent on the day after the company slashed its Q2 profit guidance.
Profit-taking hit shares of Alexion Pharmaceuticals (ALXN). The stock closed down a little less than 6 percent on the day after surging in intra-day trade on Friday in the wake of takeout rumors.
WebMD (WBMD) also was dragged down by profit taking on Monday. The stock closed the session around 5 percent lower. WebMD soared on Friday after the company lifted its fiscal Q2 and full-year outlook.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
In this March 1, 2013 photo, a crane removes a container from a ship at the Port of Baltimore’s Seagirt Marine Terminal in Baltimore. The government reports on the U.S. trade deficit for March, Thursday, May 2, 2013. (AP Photo/Patrick Semansky)
In this March 1, 2013 photo, a crane removes a container from a ship at the Port of Baltimore’s Seagirt Marine Terminal in Baltimore. The government reports on the U.S. trade deficit for March, Thursday, May 2, 2013. (AP Photo/Patrick Semansky)
| Buy AP Photo Reprints | ||
|
WASHINGTON (AP) — The U.S. economy grew at a modest 2.4 percent annual rate from January through March, slightly slower than initially estimated. Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.
The Commerce Department said Thursday that economic growth in the first quarter was only marginally below the 2.5 percent annual rate the government had estimated last month. That’s still much faster than the 0.4 percent growth during the October-December quarter.
Most economists think growth is slowing to around a 2 percent annual rate in the April-June quarter as the economy adjusts to federal spending cuts, higher taxes and further global weakness. Still, many say the decline may not be as severe as once thought. That’s because solid hiring, surging home prices and record stock gains should keep consumers spending.
Jennifer Lee, senior economist at BMO Capital Markets, said the small revision to first-quarter growth supported her view that the economy will grow a moderate 2.2 percent for the year, the same as last year.
Still, Lee expects growth to improve to 3.2 percent in 2014, as the job market accelerates and consumers grow more confident in the economy.
Consumer spending accounts for 70 percent of economic activity as measured by the gross domestic product. GDP is the economy’s total output of goods and services, from haircuts and computers to trucks and aircraft carriers.
The government’s second look at first-quarter growth showed that consumer spending roared ahead at a 3.4 percent annual rate. That’s the fastest spending growth in more than two years and even stronger than the 3.2 percent rate estimated last month.
Healthy consumer spending shows many Americans are shrugging off an increase this year in Social Security taxes that has reduced most paychecks.
And more consumer demand could also prompt businesses to restock at a faster rate later this year. Business inventories grew in the first quarter but at a slightly slower pace than first estimated. That was a key reason for the small revision.
A big reason that consumers have been able to withstand the higher taxes is the job market has improved. Employers have added an average of 208,000 jobs a month since November. That’s well above the monthly average of 138,000 during the previous six months.
Surging stock prices and steady home-price increases have also allowed Americans to regain the $ 16 trillion in wealth they lost to the Great Recession. Higher wealth tends to embolden people to spend more. Some economists have said the increase in home prices alone could boost consumer spending enough to offset a Social Security tax increase.
The weakest area of the economy continues to be government spending, which fell for the 10th time in the last 11 quarters. The 4.9 percent rate of decline was even larger than first estimated, reflecting further drops in defense spending and weaker activity at the state and local level.
Economists were puzzled by the steeper decline at the state and local level. Spending among those governments fell in the first quarter at an annual rate of 2.4 percent — double the initial estimate and the biggest quarterly drop in two years.
And with the federal government furloughing workers and trimming other spending to meet the mandates of the sequester, government activity will be a drag on growth for the rest of the year.
“The fiscal squeeze will continue for the rest of the year,” said Paul Ashworth, chief U.S. economist at Capital Economics. Still, Ashworth doesn’t see economic growth slowing very much in the current quarter. He projects growth in the April-June quarter to come in at a rate between 2 percent and 2.5 percent.
The housing recovery continued to add to growth at the start of the year. Home construction, one of the economy’s top performers, grew at an annual rate of 12.1 percent in the first quarter, its third consecutive quarter of double-digit growth.
Businesses, however, reduced the pace of their investment in equipment and computer software. That slowed to a growth rate of 4.6 percent in the first quarter, down from growth of 11.8 percent in the fourth quarter.
