By Wallace Witkowski and Sara Sjolin, MarketWatch
Apple shares close below $115
U.S. stocks closed lower Tuesday, but off the session lows hit
when one Federal Reserve president indicated a September
interest-rate hike is likely unless there is a significant
deterioration in the economy.
The Dow Jones Industrial Average finished down 47.51 points, or
0.3%, to close at 17,550.69, after being down nearly 93 points
intraday.
The S&P 500 slipped 4.72 points, or 0.2%, to 2,093.32, after
being down as much as 9 points. The Nasdaq Composite Index lost
9.84 points, or 0.2%, to finish at 5,105.55, after being down
almost 23 points.
While stocks had been choppy for most of the session, they
lurched lower after Federal Reserve Bank of Atlanta President
Dennis Lockhart told The Wall Street Journal
(http://www.wsj.com/articles/atlanta-feds-lockhart-fed-is-close-to-being-ready-to-raise-short-term-rates-1438709252)
that "there is a high bar right now to not acting." That was seen
as a signal that Fed officials are serious about raising rates in
September.
Among the day's notable individual moves, shares of Apple
Inc.(AAPL) closed down 3.8%.
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)
Tuesday's early-session was choppy following a weak session
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.
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.
"It is a tough market for people to trade," Frederick said.
Nicholas Colas, chief market strategist at Convergex, in a
Tuesday note warned that "August is going to be a long and lonely
month for U.S. equity markets." The month is traditionally a slower
month for activity as traders take summer vacations.
"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.
Data due 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).
Earnings: The reporting season continues at full speed on
Tuesday.
Shares of Coach Inc. (COH) closed up 3.2% 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 4.5% 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 2.5% 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).
Read more about the day's stock moves here
(http://www.marketwatch.com/story/walt-disney-sprint-coach-earnings-in-focus-tuesday-2015-08-04)
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 slumped 1.2% on its second trading day after being closed
for five weeks.
Oil prices partly recovered from Monday's selloff. Brent crude
on London's ICE Futures inched back just shy of $50 a barrel
(http://www.marketwatch.com/storyno-meta-for-guid), while the U.S.
benchmark settled up 57 cents at $45.74 a barrel.
Metals prices declined
(http://www.marketwatch.com/story/gold-futures-look-to-get-off-the-mat-2015-08-04),
while the dollar strengthened
(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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