U.S. stocks are struggling to stage a bounce back from yesterday’s sharp drop, as investors digest a slew of earnings results and data that had jobless claims little changed last week. Relatively mixed corporate earnings continue to be very much in focus as traders look for market direction, but a very weak read on the Philly Fed Manufacturing Survey indicating deteriorating general business conditions have many investors concerned about the health of the economy.
On the technical front, the S&P 500 is trading below its latest upward trend line for the second day in a row, opening below this critical threshold, which is currently coming around 1,565. In today’s trading session, technicians are currently looking for support at the Index’s 50-day moving average (green line), which has held all year thus far (see below).
As of 10:45AM, the S&P 500 is off -0.3% to 1,546.
Main Factors Driving Early Trade:
– Disappointing Philadelphia Fed Manufacturing Survey for April – Business among manufacturers in the Philadelphia region softened slightly in April. The bank’s business-conditions index edged down to 1.3 from 2.0 in March, though any reading above zero indicates that manufacturers are still expanding. Economists expected the index to rise to 4.0. The Fed reported that the index for new orders fell to negative 1.0 in April from 0.5 in March.
– Minor Increase In Weekly U.S. Jobless Claims – Weekly jobless claims rose slightly from last week. But keep in mind, at that point they had taken a surprise drop. The Labor Department says there were 352,000 new claims filed. The four-week moving average for new claims, a better measure of labor market trends, rose 2,750 to 361,250.
– Mixed Earnings Results – Verizon (VZ), Morgan Stanley (MS) and Pepsi (PEP) all beat the street with their quarterly reports. VZ and PEP are up today, but MS is off over -4%. Meanwhile, EBay (EBAY) reported Q1 revenue of $3.75 billion, missing expectations for $3.77 billion, also lowering Q2 guidance. UnitedHealth (UNH), the largest U.S. health insurer, said that its first-quarter profit had fallen, in part because of lower U.S. government payments for its private Medicare services and prescription plans for older Americans. EBAY and UNH off -5% and -4%, respectively.
– Apple Under Pressure – AAPL shares continue to slide, falling below $400 with tomorrow representing the stock’s seven-month anniversary of it’s all time closing high. Apple was trading at $705 back in September. It’s now at less than 60% of that, and has shed 22% of its value since the start of the year.