U.S. stocks closed lower again overnight but losses were mild compared to the previous session. Financials declined again on concerns a recovery may be further down the track. There was plenty of economic news but the lower than expected read on factory orders was a disappointment.
The minutes from the Federal Reserve’s last meeting were released which showed the central bankers thought the economy was stabilizing and that construction was starting to pick up, which is a good sign for the housing market. The bankers also discussed the need to continue implementing an exit strategy after it injected billions into the financial system.
The Dow Jones industrial average fell 30 points to 9,281. The S&P500 Index lost 3 points to 995 and the NASDAQ dropped just 2 points to 1,967.
In economic news: Payroll services firm ADP said employers in the private sector cut 298,000 jobs in August which was higher than economists were expecting but came in lower than the July number of 360,000 job cuts.
Challenger, Gray & Christmas reported 76,456 job cut announcements in August, which was 21% less than in July which could be a sign of recovery.
A Labor Department report showed that non-farm productivity rose at a 6.6% annual rate during the second quarter which was inline with expectations.
The Commerce Department said factory orders rose 1.3% in July, which came in less than expected.
In company news: Shares in BP (NYSE:BP) finished 4.08% higher at $52.53 as the oil company said it had found a giant oil resource, at its Tiber Prospect in the Gulf of Mexico. The well is one of the deepest wells ever drilled at 35,055 feet and shares rallied on the news despite many other oil companies declining on the lower oil price.
Shares in Pfizer (NYSE:PFE) lost 0.61% to $16.28 as the pharmaceutical company said it will plead guilty to a criminal charge related to its promotion of now-obselete pain killer Bextra. Pfizer will pay $2.3 billion to settle charges it wrongly marketed 13 medicines.
Shares in Wells Fargo (NYSE:WFC) declined 0.46% to $26.09 along with the general banking sector as it said it will repay the $25 billion in bailout funds it took from the U.S. government. The bank expects to pay it back from internal funds as opposed to through issuing new shares.
Shares in diversified manufacturer Danaher (NYSE:DHR) gained 2.83% to $62.13 as it announced it was buying the life sciences instrument business of Canadian MDS for $650 million in cash including a 50% stake in AB SCIEX. It will buy the rest of AB SCIEX for $450 million. Danaher also said it is cutting more jobs as part of its restructuring plan.
Checking the NASDAQ Top 100: The best performer was Liberty Global adding 3.25 per cent to $21.93. First Solar and Electronic Arts were the next best performers.
Looking at the downside, CA Inc was the worst performer as the software maker's CEO John Swainson, who helped the firm recover after a $2.2 billion accounting scandal, said he will retire by the end of the year, sending shares 7.59 per cent lower to $20.20. Shares in Joy Global and Vertex Pharmaceuticals also declined.
