Daily Market Commentary for August 24, 2011
Eastern seaboard monitoring Hurricane Irene which has been upgraded to a Category 3. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
Orders for U.S. durable goods jumped 4.0% in July, mainly due to increased demand for autos and commercial aircraft. Continued weakness of the U.S. economy accounted for a fall in most other durable goods. Orders excluding defense rose 4.8%. Because of a bounce-back in airline and auto sales, orders for transportation shot up 14.5%. A sharp increase in orders at Boeing drove bookings of commercial aircraft 43.4% higher. The biggest gain in more than eight years was seen for orders of autos which surged 11.5%. Carmakers were able to put more models on their showroom floors as a parts shortage related to the Japanese earthquake last spring, eased. U.S. orders for long-lasting goods - excluding transportation - rose only by 0.7%. Orders for core capital goods- excluding transportation and government spending on defense - fell 1.5%. The reported drop in orders for core capital goods indicates the U.S. economy remains weak. The weakness may have been attributed by ongoing concerns over a global economic slowdown as well as the high-profile standoff in Washington, D.C. over the government’s borrowing limit. Several regional indicators of U.S. manufacturing activity have shown severe deterioration this month, with many companies reporting a decline in new orders. Job growth remains weak, unemployment remains high and major markets for U.S. exports such as Europe and China, appear to be slowing. New orders have slackened in areas outside of the auto and airline sectors. Bookings for communications equipment plummeted by 24.8%; bookings for communications equipment sank 24.8%; orders for electrical equipment, electronics, appliances, fabricated metals and heavy machinery all fell. A positive note, shipments of durable goods rose 2.5%, marking the seventh increase over the past eight months. Shipments of core capital equipment goods - which the government uses to help calculate quarterly reports on U.S. growth - moved slightly higher by 0.2% in July. Inventories of durable goods climbed 0.8% last month striking the 19th consecutive increase. Orders for June were revised higher to show a 1.3% drop instead of a 1.9% decline.
McGraw-Hill (NYSE: MHP) shares were higher by 6% into late morning trading or up over 2 points after reporting the company could be worth 40% more if broken up.
Dycom Industries (NYSE: DY) shares were higher by 9% into late morning trading after reporting a spike in fiscal Q4 income.
United Therapeutics (NasdaqGS: UTHR) shares plummeted by 17% into late morning trading after Deutsche Bank downgraded the biotechnology firm to hold from buy.
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