Bellwether FedEx's weak quarterly forecast and its announcement that it would eliminate 1700 positions to save costs discouraged investors, as the two-week rally in stocks appeared to be losing steam. September has been a historically down month for stocks.
FedEx, often seen as an economic bellwether because it serves a wide range of industries, also forecast second-quarter earnings below Street projections. The shipping giant's warning fueled concerns the economic recovery would be slow. Stocks traded in a narrow range, with FedEx FDX dropping nearly 3.8%. FedEx also said it will shutter 100 facilities.
This morning's stock futures indicate a modestly higher opening as investors see recent profit reports from technology companies as signs of strength in the economy. Yesterday's better-than-expected profit reports from Oracle and Research in Motion have sent Dow Jones industrial average futures up 30 points, or 0.3%, to 10,580. Standard & Poor's 500 index futures are up 3.50, or 0.3%, to 1,126.10, while Nasdaq 100 index futures are up 8.75 points, or 0.5%, to 1,958.50.
The Dow Jones Industrial Average closed at 10594.83, up 22 points or 0.2%. The broader S&P 500-stock index ended the day unchanged at 1124.66. The index, up 7.2% during September, remained below a key technical level of 1130. The tech-heavy Nasdaq Composite index edged up nearly 2 points, or about 0.1%, to 2303.25. About three stocks rose in price for every two that advanced. Trading volume continued to remain anemic.
Japan's move to control the yen's recent rise helped the U.S. dollar tack on some gains against the currency. However, the greenback weakened against the euro. Demand for safe-haven instruments such as Treasurys also waned, sending the yield on the 10-year note up to 2.76% from 2.72% late Wednesday.
Eighteen of the 30 DJIA components closed with gains on the day. Pulling the DJIA higher were Hewlett-Packard HPQ, up 1.8%, Cisco CSCO, up 1.6%, and Intel INTC up 1.3%.
Apple AAPL advanced 2.4% ahead of its today's release of its iPad device in China. The upbeat launch of Microsoft's MSFT "Halo: Reach" videogame helped the shares tack on a 0.9% gain.
After the close yesterday, Oracle ORCL reported better-than-estimated quarterly numbers on the recovery in IT spending; Research in Motion RIMM also beat projections as demand for smartphones continued to beat projections. Texas Instruments TXN, meanwhile, said it will buy back shares worth $7.5 billion, and announced an 8% dividend boost.
Barclays upgraded shares of Ford Motor Co. F to “overweight” from “equal weight,” citing cost-cutting measures. The upgrade sent shares in the automaker up 4%. FBR lowered its profit expectations on Microsoft MSFT, citing softening consumer demand for PCs.
Action was mixed among the S&P 500 industry sectors, with basic materials (+0.9%), technology (+0.7%), telecom (+0.1%), and consumer goods (+0.02%) leading the advance, while utilities (-0.6%), oil and gas (-0.5%), financials (-0.4%), industrials (-0.3%), health care (-0.2%), and consumer services (-0.2%) leading on the downside.
APPLE INC (AAPL): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
FEDEX CORP (FDX): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
TEXAS INSTRS (TXN): Free Stock Analysis Report
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