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U.S. Stocks Fall on Economic Data Before Fed Statement

*from www.bloomberg.com, May 1, 2013 (To view original article click here.)

Take Away #1: U.S. stocks fell, dragging the S&P 500 Index from a record high, on slower growth in payrolls and manufacturing as investors awaited a policy statement from the Federal Reserve.

Key Facts and Figures:

  • The S&P 500 fell 0.6% to 1,587.99 as of 1:31 p.m. in New York.
  • The Dow Jones Industrial Average slipped 92.54 points, or 0.6%, to 14,747.26.
  • Trading in the S&P 500 stocks was in line with the 30-day average at this time of day.
  • Commodity companies dropped the most among 10 S&P 500 industries as oil and copper slumped.
  • The S&P 500 climbed 03% to a record high of 1,597.57 yesterday as consumer confidence jumped and investors bet central banks around the world will continue their efforts to stimulate the economy.

Take Away #2: The Federal Open Market Committee releases its statement at 2 p.m. in Washington following a two-day meeting.

Key Facts and Figures:

  • None of the 47 economists in a Bloomberg News survey conducted from April 25 to April 29 forecast that the central bank will change the pace of its bond-purchase program this month.
  • Chairman Ben S. Bernanke will probably reduce the Federal Reserve’s monthly bond buying in the fourth quarter to $50 billion from $85 billion, economists said in a Bloomberg survey.
  • The central bank will probably leave its benchmark interest rate unchanged at 0.25% following the meeting.
  • The European Central bank announces its monthly interest-rate decision tomorrow.

Take Away #3: The Institute for Supply Management’s factory index fell to 50.7% in April from the prior month’s 51.3.

Key Facts and Figures:

  • Construction spending in the U.S. decreased 1.7% to a $856.7 billion annual rate, the least since August, the Commerce Department reported today in Washington.
  • Chinese and Australian reports today also signaled a slowdown in manufacturing.

Take Away #4: Companies added fewer workers than forecast in April, according to figures from ADP Research Institute.

Key Facts and Figures:

  • The 119,000 increase in payrolls, the smallest since September, followed a revised 131,000 gain in March that was less than initially estimated.
  • The median forecast of 37 economists surveyed by Bloomberg projected a 150,000 advance.
  • “The ADP report is somewhat disappointing because it’s just further evidence of slowdown,” said Tom Wirth of Chemung Canal Trust Co.
  • The Labor Dept. publishes its jobs and unemployment report on Friday.
  • Combined payrolls for companies and government agencies increased by 148,000 workers in April after rising 88,000 in March, according to a survey of economists by Bloomberg.

Take Away #5: Corporate earnings today will also continue to be watched closely by investors.

Key Facts and Figures:

  • Of the 340 companies in the S&P 500 that have reported so far, 73% exceeded analysts’ predictions, data compiled by Bloomberg show.
  • Profit at S&P 500 companies rose 1.1% in the first three months of the year, according to analysts’ projections compiled by Bloomberg.

Take Away #6: The Chicago Board Options Exchange Volatility Index, of VIX, climbed 6.7% to 14.42 today as investors stepped up hedging against losses in the S&P 500.

Key Facts and Figures:

  • The gauge for options reached a six-year low in March.
  • The VIX is still down 20% this year.

Take Away #7: Companies whose earnings are most tied to economic growth led the retreat.

Key Facts and Figures:

  • The Morgan Stanley Cyclical Index declined 1.2%.
  • The Dow Jones Transportation Average tumbled 2%.
  • Nine out of 10 S&P groups fell, with energy and raw materials stocks sinking at least 1.2%.
  • Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, dropped 4.2% to $20.44 as the S&P GSCI gauge of 24 commodities fell 2.1%.
  • Marathon Petroleum Corp. erased 3.8% to $75.41.
  • QEP Resources Inc. lost 6.2% to $26.92 after earnings trailed analysts’ estimates.
  • Alcoa Inc., the biggest U.S. aluminum producer, slipped 0.9% to $8.42, and said it may curtail 460,000 metric tons, or 11%, of its smelting capacity as it reviews higher-cost plants amid a price slump.

Take Away #8: Merck, MasterCard, and Allergan decline.

Key Facts and Figures:

  • Merck (MRK) fell 2.5% to $45.83.
  • The company cut its full-year projections, citing estimates for lower sales, and said it plans to buy back $15 billion in shares.
  • Merck has been eliminating thousands of jobs and trying to boost demand of existing products to overcome the revenue drop from its drug Singulair.
  • Merck’s once-leading drug Singulair is an asthma medication that began facing competition from cheaper copies in August.
  • MasterCard Inc. fell 2.9% to $536.80.
  • The second-biggest U.S. payments network reported first-quarter revenue that missed analysts’ estimates.
  • Allergan (AGN), the maker of Botox wrinkle treatment, plunged 13% to $98.52 for the biggest drop since 2008.
  • CEO David Pyott said current data doesn’t support taking the DARP in medicine into the final stages of trials needed for regulatory approval.

Take Away #9: Regeneron, Genworth, T-Mobile, and Comcast gain.

Key Facts and Figures:

  • Regeneron Pharmaceuticals Inc., which makes potential rival eye medicine Eylea, surged 13% to a record $243.84.
  • Regeneron replaced MetroPCS Communications Inc. in the S&P 500 after the close of trading yesterday.
  • Genworth Financial Inc. (GNW) added 4.5% to $10.48 as results improved at the unit that backs home loans, helping earnings more than double.
  • T-Mobile US Inc., the fourth-biggest U.S. wireless company, jumped 5.3% to $16.40 in its first day of trading on the NYSE after a merger with MetroPCS Communications, a smaller rival.
  • Comcast Corp., the largest U.S. cable company and owner of NBC Universal, gained 1.8% to $42.06.
  • Comcast said first-quarter profit rose 17% as U.S. residential video subscriber revenue increased at the highest rate in four years.

Take Away #10: Viacom gains on improved ad sales and Humana and DreamWorks also advance.

Key Facts and Figures:

  • Viacom Inc. (VIA), owner of cable networks Nickelodeon and MTV as well as Paramount film studio, added 3.6% to $66.30.
  • Viacom reported fiscal second-quarter profit that exceeded analysts’ estimates on improved advertising sales.
  • Humana Inc. (HUM) climbed 5% to $77.84 after the second-biggest private provider of Medicare coverage boosted its full-year earnings forecast to a range of $8.40 to $8.60 a share.
  • That topped the average analyst estimate of $7.95 in a Bloomberg survey.
  • DreamWorks Animation SKG Inc. rose 6.8% to $20.59.
  • The studio run by Jeffrey Katzenberg posted a surprise profit, helped by box-office hit “The Croods” and television revenue from “Madagascar 3: Europe’s Most Wanted.”

*To view original article from www.bloomberg.com click here.

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