24/7 Wall St. Closing Bell — July 6, 2012: Equities Soft on China Slowdown, European Debt

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The three major US stock indexes opened lower this morning following report from China that it has cut inflation to an annualized rate of 2.2% in June (our coverage here). Lower inflation, however, brings with it lower production, with China particularly weighed down by lack of export demand from Europe. And in Europe, Spanish 10-year bond yields moved back to 7% (our coverage here). The Federal Reserve’s report on consumer credit showed that revolving credit rose 11.25% in May, about double the expected increase, with non-revolving debt up $9.1billion and revolving debt up $8 billion (more coverage here).

The US dollar index fell today, now down -0.2% at 83.151. The GSCI commodity index also fell, down -2.5% at 605.15, with commodities prices all higher today. WTI crude oil rose 1.8% today, closing at $85.99/barrel. Brent crude trades up 1.77% at $99.93/barrel, as a lockout appears imminent in Norway’s North Sea fields (our coverage here). Natural gas is up 3.9% today to $2.884/thousand cubic feet. Gold settled up 0.7%, at $1,589.10/ounce.

The unofficial closing bells put the DJIA down about 36 points to 12,736.29 (-0.28%), the NASDAQ fell more than 5 points (-0.19%) to 2,931.77, and the S&P 500 fell -0.16% or more than 2 points to 1,352.46.

There were several analyst upgrades and downgrades today, including an unusual number of ‘sell’ ratings: Boston Beer Co. (NYSE: SAM) cut to ‘sell’ at UBS; Mastercard Inc. (NYSE: MA) cut to ‘sell’ at UBS; Visa Inc. (NYSE: V) cut to ‘sell’ at Visa Inc.; TD Ameritrade Holding Corp. (NASDAQ: AMTD) cut to ‘sell’ at Goldman Sachs; and State Street Corp. (NYSE: STT) cut to ‘neutral’ at Goldman Sachs.

There were no earnings reports of note today, but a new earnings season kicks off with Alcoa Inc. (NYSE: AA) reporting after the markets close this afternoon. Other companies reporting on Monday include Healthcare Services Group Inc. (NASDAQ: HCSG) and WD-40 Co. (NASDAQ: WDFC).

Tomorrow we are scheduled to get earnings results from SemiLEDS Corp. (NASDAQ: LEDS) Wolverine World Wide Inc. (NYSE: WWW), Shaw Group Inc. (NYSE: SHAW), Helen of Troy Ltd. (NASDAQ: HELE). And here’s a look at some key earnings to watch this week.

Some standouts from today include the following stocks:

Amerigroup Corp. (NYSE: AGP) is up XX% at $XX after posting a new 52-week high of $XX earlier today. The health care services company is being acquired by Wellpoint Inc. (NYSE: WLP). More coverage here and here.

FX Alliance Inc. (NYSE: FX) is up XX% at $XX. The foreign exchange platform supplier is being acquired by Thomson Reuters (NYSE: TRI).

Bridgepoint Education Inc. (NYSE: BPI) is down -XX% at $XX. The for-profit education company was denied accreditation and faces a December deadline to renew its existing accreditation. More coverage here.

Stay tuned for Tuesday. St. Louis Fed President James Bullard is giving a speech. We have noted the following events on the schedule (all times Eastern):

  • 7:30 a.m. – National Federation of Independent Business optimism index
  • 11:30 a.m. – 4-week bill auction
  • 1:00 p.m. – 3-year note auction
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Paul Ausick