U.S. stocks and exchange traded funds (ETFs) are in negative territory this morning as weak economic news has investors growing increasingly wary of an economic recovery.
The Commerce Department reported that orders to U.S. factories for big-ticket manufactured goods, or durable goods, unexpectedly dropped 2.5% in June. The decline was driven primarily by weak demand in commercial aircraft and the troubles faced by the automotive industry. Economists were expecting a drop of 0.6%.
More earnings came out today, as well:
- Media giant Time Warner (TWC) reported a decline in profits of 34%. The decline was caused by slow DVD sales and a decline in revenue from the company’s publishing, movie and online properties arm.
- The nation’s third-largest wireless service provider, Sprint Nextel (S), said its losses widened in the second quarter as revenue and subscribers continued to decline. The company reported a loss of $0.13/share and wasn’t even close to Wall Street’s expectations of a loss of $0.02/share.
- ConocoPhillips (COP) reported a decline in earnings by 76%, slightly beating expectations. On a positive note, the oil company said that daily production was up about 7% from a year ago.
- Virginia-based General Dynamics (GD) said that earnings dropped by 3.6%, a hair above analysts’ expectations.
In the technology world, Microsoft (MSFT) and Yahoo (YHOO) have formed an Internet partnership that will enable Microsoft to gain access to Yahoo’s search engine audience. The deal is expected to increase revenues at both companies and put pressure on search engine leader Google (GOOG). The ink on the deal isn’t expected dry for a couple more years. The news sent the Technology Select Sector SPDR (XLK) down nearly 0.6% in morning trading; MSFT is 10.3% and YHOO is 1.3%.
Overall all three major U.S. indexes are down, with the S&P 500 giving up nearly 0.5%, followed by the Nasdaq, down 0.4% and the Dow Jones Industrial Average down nearly 0.3%.
For more stories on technology, visit our technology category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.