Share

US stocks fall on early trade

New York - US stocks fell on Monday as weak data on the housing market and services sector were the latest indications of worsening economic conditions, taking the S&P 500 below a key support level.

While acquisition activity limited the market's decline, keeping indexes near record levels, investors found few reasons to buy as the data followed some high-profile disappointments in corporate earnings, including from Amazon.com and Caterpillar last week.

Pending home sales unexpectedly fell 1.1% in June. The report follows a drop of 8.1% in June new home sales, the biggest slump in almost a year. The PHLX housing sector index fell 1.6%. D.R. Horton Inc fell 1.7% to $21.24.

Activity in the US services sector was at its most brisk in nearly five years in July, though readings for new business and employment growth weakened, according to financial data firm Markit's preliminary data.

"This isn't the first soft data point we've gotten on housing recently, which suggests the sector is decelerating, a real discouragement," said Liam Dalton, president of Axiom Capital Managementin New York. "The data suggests it is time to be cautious over the idea of a robust economy."

Later this week will see the release of data on second-quarter gross domestic product, as well as the July payroll report.

The Dow Jones industrial average fell 65.63 points or 0.39%, to 16 894.94, the S&P 500 lost 9.24 points or 0.47%, to 1 969.1 and the Nasdaq Composite dropped 31.14 points or 0.7%, to 4 418.42.

With the day's move, the S&P 500 fell below its 14-day moving average, a level that had served as support on Friday. The benchmark index remains about 1% away from an all-time record reached last week.

Dollar Tree

Dollar Tree announced plans to acquire rival Family Dollar, unifying two leading discount retailers into a company with more than 13 000 stores across North America. The cash-and-stock transaction, was valued at $8.5bn, or $9.2bn including debt.

Dollar Tree gained 2.8%, while Family Dollar surged 22.3% higher.

Real estate website Zillow announced it was buying rival Trulia in a $3.5bn stock deal. Zillow shares fell 5.4%, while Trulia gained 8.9%.

Analysts said investors were unlikely to place large bets Monday ahead of a packed calendar this week, including a Federal Reserve monetary policy meeting, a heavy earnings schedule and data on second-quarter US economic growth and July's labor market.

Tyson Foods jumped 5.6% as it announced plans to divest its Mexican and Brazil poultry businesses to Brazil's giant meatpacker JBS for $575m. JBS owns Tyson's US rival Pilgrim's Pride.

Tyson meanwhile announced a 4.4% rise in third-quarter earnings to $260m and projected "at least" 10% growth in earnings-per-share in 2015.

Cummins, which manufacturers engines for buses and industrial use, fell 3.2% as second-quarter earnings of $2.43 per share bested analyst expectations by five cents, but revenues of $4.8bn fell shy of the $4.83bn analyst forecast.

Bond prices were mixed. The yield on the 10-year US Treasury edged up to 2.48% from 2.47% Friday, while the 30-year held steady at 3.24%. Bond prices and yields move inversely.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you think corruption-accused National Assembly Speaker Nosiviwe Mapisa-Nqakula will survive a motion of no confidence against her?
Please select an option Oops! Something went wrong, please try again later.
Results
No, her days are numbered
42% - 528 votes
Yes, the ANC caucus will protect her
58% - 742 votes
Vote
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.38
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE