By Anora Mahmudova and Sara Sjolin, MarketWatch
Whole Foods Market plunges after earnings miss
U.S. stocks were off session lows and switching between small
gains and losses in choppy trade Thursday, after data showed the
economy picked up its pace in the second quarter, leaving the
Federal Reserve on track to raise interest rates as soon as
September.
In another sign that the economy is healing, weekly jobless
claims rose last week after hitting a 40-year low but still
remained near the lowest levels in decades.
The S&P 500 was off 1 point at 2,107.13, with five of its 10
main sectors trading lower. Gains in the utility and
consumer-discretionary sectors were offset by losses in energy
stocks.
The Dow Jones Industrial Average dropped as much as 105 points,
but recovered to trade 16 points, or 0.1% lower at 17,734.
Meanwhile, The Nasdaq Composite was enjoying a move higher, up
16 points, or 0.3%, at 5,128.31.
Overall, the reading on gross domestic product was better than
expected, considering the first-quarter number was raised. The GDP
numbers are likely to influence the Federal Reserve's decision on
the timing of the first rate hike, according to analysts.
"The U.S. economy bounced back in the second quarter as expected
and revisions show that it expanded in the first quarter...," said
Joseph Lake, global economist at The Economist Intelligence Unit in
emailed notes.
See: U.S. GDP report puts Fed on track for September rate hike
(http://www.marketwatch.com/story/us-gdp-report-puts-fed-on-track-for-september-rate-hike-2015-07-30).
Confirmation of a "decent first half to the year for the U.S.
economy means that the Fed is on track to lift the federal-funds
rate in September," Lake said.
GDP data:The U.S. economy expanded
(http://www.marketwatch.com/story/us-gdp-report-puts-fed-on-track-for-september-rate-hike-2015-07-30)at
an annualized 2.3% rate in the second quarter, while first-quarter
growth was increased from negative 0.2% to 0.6%. Growth was led by
consumer spending on big-ticket items such as new cars as well as
home construction, the government said Thursday.
The number of people who applied for U.S. unemployment benefits
rose by 12,000
(http://www.marketwatch.com/story/jobless-claims-move-up-a-bit-from-four-decade-low-2015-07-30)
to 267,000 in week ended July 25, the government said Thursday.
Read:What the huge change to how GDP is calculated means for
U.S. economy
(http://www.marketwatch.com/story/here-comes-the-big-fix-to-gdp-what-it-says-about-the-us-economy-2015-07-29)
The Fed on Wednesday kept rates on hold as expected, but hinted
strongly that it is ready to start tightening monetary policy in
the fall
(http://www.marketwatch.com/story/fed-will-raise-rates-in-september-2015-07-29),
depending on improvement in incoming data.
The dollar rose on the expectations of a 2015 rate hike, and the
ICE dollar index continued its ascent on Thursday
(http://www.marketwatch.com/story/dollar-rises-against-yen-euro-after-fomc-2015-07-30-11033421)
as well, rising 0.7% to 97.646.
Brad McMillan, chief investment officer at Commonwealth
Financial Network, sounded more sanguine about rate hikes.
"If the Fed begins normalizing rates, it means they are
confident the economy is doing well. Given the fact they are still
maintaining the balance sheet and reinvesting means that the policy
is still very accommodative. They are not taking away the punch
bowl yet, they are just not spiking it as much," he said.
Earnings:Whole Foods Market Inc.(WFM) plunged 11% after the
supermarket chain on Wednesday posted earnings that missed
forecasts.
Colgate-Palmolive Co.(CL) shares dropped 1.3% after the
consumer-products company reported earnings that matched forecasts
(http://www.marketwatch.com/story/colgate-palmolive-profit-matches-estimates-sales-slightly-short-2015-07-30).
Procter & Gamble Co. (PG), another consumer-goods company,
fell 3.6% after its fiscal fourth-quarter revenue slightly missed
expectations
(http://www.marketwatch.com/story/procter-gamble-beats-profit-expectations-but-provides-downbeat-outlook-2015-07-30).
Air Products & Chemicals Inc.(APD) surged 5.3% after it
reported profit and revenue that beat Wall Street average
estimates.
Shares of Facebook Inc.(FB) lost 3% after the social-media
company late Wednesday reported a drop in second-quarter earnings
(http://www.marketwatch.com/story/facebook-beats-profit-views-while-expenses-jump-2015-07-29-16485210).
U.S.-listed shares of Nokia Corp.(NOK) jumped 5.5% after the
Finnish telecom-equipment company reported better-than-expected
second-quarter profit
(http://www.marketwatch.com/story/nokia-beats-expectations-on-higher-software-sales-2015-07-30-14854044).
U.S.-listed shares of Anheuser Busch InBev NV (ABI.BT) slumped
4.7% after the brewer said profit fell in the second quarter
(http://www.marketwatch.com/story/ab-inbev-profit-falls-on-us-europe-weakness-2015-07-30),
as weakness in the U.S. and Europe weighed on sales volume.
Shares of Synergy Pharmaceuticals Inc.(SGYP) soared 9.5% after
the drug maker said test results were positive for its plecanatide
treatment for patients with chronic idiopathic constipation.
Read more in today's Movers & Shakers column
(http://www.marketwatch.com/story/time-warner-cable-conocophillips-mondelez-linkedin-earnings-in-focus-2015-07-29).
Other markets: Stock markets in Asia closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), with the
Shanghai Composite Index shaving off an earlier gain and ending
2.2% lower.
In Europe, the Stoxx Europe 600 index rose on the back of a
round of well-received earnings reports
(http://www.marketwatch.com/storyno-meta-for-guid).
10-year Treasurys
(http://www.marketwatch.com/story/treasury-yields-rise-reverse-amid-gdp-data-month-end-extensions-2015-07-30)
moved higher, sending their yield, which moves inversely to prices,
lower, down 2 basis points at 2.27%.
Gold (http://www.marketwatch.com/storyno-meta-for-guid) declined
and traded near a 5 1/2 -year low, while crude-oil futures were
volatile, last trading 0.4% higher at $48.98 a barrel.
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