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Reports US

US stock market, economy and companies update (May 01, 2014)

May 1, 2014, Thursday, 15:35 GMT | 10:35 EST | 19:05 IST | 21:35 SGT
Contributed by Trade The News

- Equity markets are choppy this morning as volumes tick somewhat lower. Weakness in a broad spectrum of mid- and small-cap names offsets the positive April manufacturing data. Meanwhile, the benchmark 10-year yield tumbled to a two-week low of 2.619% as traders position themselves conservatively ahead of tomorrow's April jobs report. As of writing, the DJIA is up 0.05%, the S&P500 is up 0.05% and the S&P500 is up 0.79%.

- Traders are watching volatility on the Russell 2000 closely this morning. The index has been seeing exaggerated moves over recent sessions, and earlier this morning there were vague unsubstantiated rumors about Good Harbor Financial LLC undertook its monthly reshuffle names, impacting midcap names. The Russell 2000 dipped 1% in the first 30 minutes of trade but has regained most losses mid-morning.

- The final Markit PMI confirmed its preliminary view that US manufacturing activity continues to expand for a second straight month in April, but below the four-year high in the index seen in February. The employment subindex fell from to 53.7 from 53.9 in March, the lowest in three months. Meanwhile the April ISM manufacturing index saw its fourth straight month of incremental gains, although it remains well below the one-year high of 57 seen in December.

- The big April jobs report is only a day away, and this morning's weekly jobless claims data is somewhat dampening enthusiasm. Both the initial and continuing claims figures saw unexpected increases.

- Russian President Putin told German Chancellor Merkel that Ukraine must remove its military from the southeastern region of the country in order resolve the showdown there with pro-Russian militants who are talking over local government administrations. The IMF warned that if Ukraine loses effective control of the eastern part of the country, the $17B bailout package would have to be redesigned.

- April auto sales out earlier were mixed. General Motor's sales gained 6.9%, more than expected, Chrysler slightly topped expectations and Ford missed. Ford's overall sales actually decreased 0.7% versus a +3% consensus view, however truck sales remained very strong, with overall April sales +8%, twice the March gain. A GM sales executive said retail demand was steady in the month as the economy continues to strengthen. Additionally, Ford announced that CEO Alan Mulally would step down as chief on July 1st. Over his eight-year term, Mulally transformed Ford from a money-loser to a thriving firm. He will be replaced by Mark Fields, the current chief operating officer.

- Drug and medical supplies distributor Cardinal Health met diminished expectations in its third quarter, however the company's net income fell about 9% and revenue fell 15% as the termination of a big contract back in 2013 again clipped its bottom line. Shares of CAH are down 6% or so. Like other health insurance names, Cigna broadly beat expectations on a big surge in membership from the Obamacare reforms. CI is up 3.4%. Shares of general insurance giant Metlife are regaining ground lost in the post market after disappointing Q1 results.

- Among the biggest gainers this morning is Weight Watchers, with shares of WTW adding to yesterday's aftermarket gains to top out up more than 25%. The firm stomped expectations and raised its FY14 guidance, as investors resoundingly approve new CEO Chambers' turnaround plan.

***Looking Ahead***
- 13:30 (UK) BOE's Cunliffe in London
- 19:30 (JP) Japan Mar Jobless Rate: 3.6%e v 3.6% prior

***Economic Data***
- (US) Apr Challenger Job Cuts: 40.3K v 34.4K prior; Y/Y: +5.7% v -30.2% prior
- (US) May RBC Consumer Outlook Index: 50.1 v 50.0 prior
- (US) Initial Jobless Claims: 344K v 320Ke; Continuing Claims: 2.771M v 2.70Me
- (US) Mar Personal Income: 0.5% v 0.4%e; Personal Spending: 0.9% v 0.6%e
- (US) Mar PCE Deflator M/M: 0.2% v 0.2%e; Y/Y: 1.1% v 1.1%e
- (US) Mar PCE Core M/M: 0.2% v 0.2%e; Y/Y: 1.2% v 1.2%e
- (US) Apr Final Markit Manufacturing PMI: 55.4 v 55.4e
- (US) Apr ISM Manufacturing: 54.9 v 54.3e; Prices Paid: 56.5 v 59.5e
- (US) Mar Construction Spending M/M: 0.2% v 0.5%e
- (US) Weekly EIA Natural Gas Inventories: + bcf vs. + bcf expected range