By Wallace Witkowski and Sara Sjolin, MarketWatch
Apple drops; Twitter recovers off intraday low
U.S. stocks slid into the red following a morning of switching
between gains and losses Tuesday, as investors await a batch of
economic reports headlined by the key jobs reports due later in the
week.
Shares of Apple Inc.(AAPL) fell more than 3%, limiting gains on
the main indexes. Read: Apple's stock drops below 2 bearish
technical levels
(http://www.marketwatch.com/story/apples-stock-drops-below-2-bearish-technical-thresholds-2015-08-04)
The Dow Jones Industrial Average declined 47 points, or 0.3%, to
17,551.46, the S&P 500 slipped almost 4 points, or off 0.2%, to
2,093, and the Nasdaq Composite Index lost 14 points, or 0.3%, to
5,100.79.
Last week's lackluster wage-growth figures
(http://www.marketwatch.com/story/you-can-see-higher-wages-everywhere-but-in-the-data-2015-07-31)
and a weak rise in consumer spending
(http://www.marketwatch.com/story/consumer-spending-takes-a-cooler-turn-in-june-2015-08-03)
are weighing on investors's minds, forcing markets into a sideways
situation, said Randy Frederick, managing director at the Schwab
Center for Financial Research, in a phone interview.
The early swings in direction follow a weak session from Monday
(http://www.marketwatch.com/storyno-meta-for-guid), when all three
stock averages closed firmly lower after disappointing U.S.
economic data and a slump in oil prices
(http://www.marketwatch.com/storyno-meta-for-guid). A report on
manufacturing activity came in lower than expected
(http://www.marketwatch.com/story/ism-manufacturing-data-released-early-has-soft-tone-2015-08-03),
reigniting fears that growth in the world's largest economy is
losing momentum.
"It is a tough market for people to trade," Frederick said.
Nicholas Colas, chief market strategist at Convergex, in a
Tuesday note warmed that. "August is going to be a long and lonely
month for U.S. equity markets."
"Domestic stocks hover at the upper end of comfortable
valuations, and market internals aren't helping much to mitigate
the volatility that comes with those high price/earnings ratios,"
Colas said, suggesting that stocks may be more expensive than their
fundamental performance can support.
While the Federal Reserve has indicated that it will raise
interest rates some time in 2015 unless there is a significant
downturn in economic conditions, Colas doesn't see the first rate
happening in September, which may be spooking investors.
Data out later this week could also dictate the future trading
direction. On Friday, the top-tier nonfarm-payrolls report is due,
which will be scrutinized for clues to the strength of the
labor-market recovery. The Federal Reserve has said it is watching
economic indicators--wages and employment numbers in particular--as
it assesses when to hike interest rates.
The ADP employment report, considered a precursor to the nonfarm
data, is due on Wednesday.
Factory orders rose 1.8% in June, less than economists surveyed
by MarketWatch had expected
(http://www.marketwatch.com/story/us-factory-orders-increase-18-in-june-2015-08-04).
There are no Federal Reserve speakers on the docket.
Earnings: The reporting season continues at full speed on
Tuesday.
Shares of Coach Inc. (COH) jumped more than 2% after the luxury
accessories maker reported better-than-expected profit and sales
(http://www.marketwatch.com/story/coach-shares-fall-in-premarket-after-company-offers-soft-outlook-2015-08-04)
for its fiscal fourth quarter but offered a cautious outlook for
the coming year.
Sprint(S) climbed 3% higher after the telecom company reported a
narrower-than-expected loss
(http://www.marketwatch.com/story/sprint-shares-rise-as-company-posts-narrower-than-expected-loss-2015-08-04)
for its fiscal fourth quarter.
CVS (CVS) dropped 3% after the drugstore chain gave a soft
earnings outlook for its current quarter
(http://www.marketwatch.com/story/cvs-health-offers-soft-outlook-as-sales-rise-2015-08-04).
After the closing bell, earnings from DreamWorks Animation
Inc.(DWA) and Walt Disney Co.(DIS) are on tap.
Read: What to look for in Disney's earnings
(http://www.marketwatch.com/story/what-to-look-for-in-disneys-earnings-2015-08-03)
Movers and shakers:Twitter Inc.(TWTR) opened at a fresh record
low but has since recovered with a 1% gain.
Other markets: Chinese shares moved sharply higher
(http://www.marketwatch.com/storyno-meta-for-guid) after officials
announced fresh steps to rein in short selling.
In Europe, markets were generally lower
(http://www.marketwatch.com/storyno-meta-for-guid). Greece's Athex
Composite slumping 2.1% on its second trading day after the market
reopened after being closed for five weeks.
Oil prices partly recovered from Monday's selloff. Brent crude
on London's ICE Futures inched back above $50 a barrel
(http://www.marketwatch.com/storyno-meta-for-guid), while the U.S.
benchmark gained 77 cents to $45.94 a barrel.
Metals prices were mixed
(http://www.marketwatch.com/story/gold-futures-look-to-get-off-the-mat-2015-08-04),
while the dollar declined
(http://www.marketwatch.com/story/dollar-weakens-against-commodity-linked-rivals-as-oil-rebounds-2015-08-04)
against most other major currencies.
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