Following the release of some mixed economic data, stocks are seeing notable declines in early afternoon trading on Friday. Weakness within the automotive sector is putting pressure on the markets as well.
Investors are looking over two key economic reports that give a mixed outlook on the economy. The Labor Department said employment continued to decrease in the month of July, although the drop in jobs was smaller than expected. At the same time, the report showed that the unemployment rate jumped to a four-year high.
Meanwhile, the Institute for Supply Management released its report on manufacturing activity in the month of July. The report showed no change in business activity compared to the previous month.
Elsewhere in the economy, construction spending fell by a little more than expected in the month of June, according to a report released by the Department of Commerce on Friday, with the decrease reflecting continued weakness in residential construction.
In corporate news, General Motors (GM) reported a much wider than expected quarterly loss before it reports its sales numbers. Elsewhere in the automotive sector, Ford (F) reported a nearly 15 percent drop in U.S. vehicle sales in July, led lower by weak sales of trucks and SUVs. Additionally, Toyota Motor (TM) said its U.S. July sales decreased by 12 percent.
The major averages continue to show weakness in recent trading. The Dow is currently down 63.75 at 11,314.27, the Nasdaq is down 19.44 at 2,306.11 and the S&P 500 is down 8.45 at 1,258.93.
Among stocks that are seeing notable activity, Cree Inc. (CREE) and Ameren Corp. (AEE) have set new yearly lows. The stocks are currently down 9.1 percent and 3.7 percent, respectively.
Sector News
Steel stocks are turning in some of the worst performances in afternoon trading. The Amex Steel Index is currently down 3.5 percent, adding to a sharp loss posted in the previous session. On Wednesday, the index set a two-week closing high.
Within the steel sector, Nucor Corporation (NUE) is seeing significant selling pressure. The stock is falling 4.8 percent after setting a six-month intraday low earlier in the session. On Thursday, the steelmaker announced that it would install a $110 million plate-heat-treating facility at its plate mill in North Carolina.
Some biotechnology stocks are also seeing significant selling pressure, sending the Amex Biotechnology Index down 1.8 percent. With the drop, the index is pulling back from a more than 10 year closing high set in the previous session.
Within the sector, Biogen Idec (BIIB) is down 25.4 percent after the company reported two confirmed cases of a potentially deadly brain infection in multiple-sclerosis patients being treated with Tysabri.
Computer hardware stocks are posting substantial losses as well. The Amex Computer Hardware Index is seeing a decline of 2 percent, ending its three-day uptrend. Chemical, transportation and utility stocks are also showing weakness.
On the other hand, bank stocks are notably higher. The S&P Bank Index is up 0.8 percent, led higher by MGIC Investment Corp. (MTG), which is up 12 percent. Healthcare and natural gas stocks are also showing strength.
Stocks In The News
Among individual stocks, Oshkosh (OSK) is seeing significant selling pressure after the company reported a third quarter loss and also gave an earnings forecast for its fourth quarter that was well below analysts view.
Shares of the truck maker are currently trading down 11 percent, adding to losses posted in the past two sessions. Earlier in the day, the stock fell to a five-year intraday low.
Meanwhile, Sun Microsystems (JAVA) reported a 73 percent drop in its fourth-quarter profit earlier in the day, sending its stock sharply lower. The drop in profit was due to slumping sales and restructuring charges. Shares of Sun Microsystems are down 12.5 percent, reversing the gain posted in the previous session.
On the other hand, Scotts Miracle-Gro (SMG) is showing considerable strength after the company reported an adjusted third quarter profit that topped analysts' expectations. The lawn products company also reiterated its 2008 earnings expectations of at least $2 per share. The stock is climbing 32.3 percent after setting a six-week intraday high.
Other Markets
Stock markets across the Asia-Pacific region closed mixed on Friday after opening lower on concerns about the strength of the world's largest economy. The markets in China, Hong Kong and India recovered to finish in positive territory, but Japan lost more than 2 percent.
The major European markets showed weakness throughout the day. While the French CAC 40 Index closed down 1.8 percent, the German DAX Index lost 1.3 percent. The U.K.'s FTSE 100 ended the day down 1.1 percent.
Meanwhile, treasuries continue to see modest gains. Subsequently, the yield on the benchmark ten-year note is currently down 3.3 basis points at 3.946 percent.
For comments and feedback: editorial@rttnews.com