Markets were mixed throughout the day, as Apple weighed down the tech heavy Nasdaq.First the scoreboard:
Dow: 12,676.05, +58, +0.5%
S&P 500: 1,337.89, No Change
NASDAQ: 2,854.24, -9, -0.3%
And now the top stories:
- Before U.S. markets opened, there was a slew of disappointing data out of Europe. The U.K. economy contracted by 0.7 per cent in the second quarter, its greatest drop in three years, after poor weather and the Queen’s Jubilee hit output. Germany also saw weakness, with business conditions falling below forecasts to 103.3 from 105.3 a month earlier.
- But European markets rallied on reports that the European Central Bank might consider giving the European Stability Mechanism, a bailout fund set to go into effect later this year, a banking licence. This would allow the ESM to borrow from the ECB, multiplying its available funding.
- Netflix shares collapsed before U.S. markets opened following its light second quarter. The entertainment company reported earnings of $0.11 and said it added 530,000 new domestic streaming subscribers, below estimates for as many as 800,000 new customers.
- Apple shares also declined after the company posted a rare earnings miss. Apple earned $9.32 per share as Mac and iPhone sales disappointed. Revenue was light at $35.0 billion, below forecasts for $37.1 billion. These two words sum up the company’s quarter >
- Before the opening bell, more than a dozen companies announced second quarter earnings. Included in them: Caterpillar and Ford Motor, both beating expectations. But Ford was forced to lower guidance as European losses cut profits 57 per cent. CATERPILLAR: This is what the world will look like for the rest of the year >
- U.S. markets ultimately opened mixed, with the Dow advancing more than 100 points on strong earnings. The Nasdaq was held back by Apple.
- At 10 a.m. the Census Bureau announced that new home sales declined 8.4 per cent sequentially in June, missing expectations and falling to the lowest level since January. Sales dropped to an annual rate of 350,000.
- Sandy Weill told CNBC that the biggest banks should be broken up, separating commercial and securities operations. Weill, the former CEO and chairman of Citigroup who grew it to its mammoth size today, said it was important to “do something that doesn’t risk tax payer dollars.” PIMCO’s Bill Gross had some snarky words for Weill >
- Mid-day, the USDA said that food prices would increase some 3 to 4 per cent next year as the drought’s full impact is felt. Beef and veal prices are likely to increase rapidly as ranchers cull their herds, according to USDA economist Ricky Volpe. Food prices usually rise 2.8 to 2.9 per cent a year. Here are 10 companies getting crushed by the drought >
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