U.S. Stocks Extend 2-Day Losses, Trade Deficit Narrows 22%

Nichole Harper
06 Aug, 2013
New York City

U.S. stocks extended losses for the second day in a row and trade deficit in June narrowed to the smallest since October 2009. Washington Post agreed to sell newspapers to Jeff Bezos for $250 million. India appointed Raghuram Rajan as its new central bank governor.

[R]11:25 PM New York – U.S. stocks extended losses for the second day in a row and trade deficit in June narrowed to the smallest since October 2009. Washington Post agreed to sell newspapers to Jeff Bezos for $250 million. India appointed Raghuram Rajan as its new central bank governor.[/R]

U.S. stocks declined for the second day in a row and investors focused on earnings and comments from Federal Reserve Bank of Chicago President Charles Evans.

S&P 500 Index declined 0.7% to 1,695.07 and Nasdaq Composite Index dropped 1% to 3,658.13.

U.S. Trade Deficit Drops 22%

The U.S. trade deficit narrowed more than expected in June and dropped to the lowest level since October 2009.

The Commerce Department said today June deficit fell 22.4% to $34.2 billion from the revised May deficit of $44.1 billion.

Exports increased 2.2% to $191.2 billion and imports declined 2.5% to $225.4 billion. Trade deficit with China declined 4.3% to $22.6 billion, with Japan increased 2.2% to $5.5 billion and with Mexico dropped 9.6% to $4.8 billion.

European Markets

European markets eased from a 10-week high and investors shifted focus to earnings.

In London trading, FTSE 100 index decreased 0.5% and in Frankfurt DAX index fell 1% and in Paris CAC 40 index declined 0.4%.

Credit Agricole increased 1.2% and the third largest bank in France said net income increased to 696 million euros from a year ago 56 million euros on the sale of its loss making Greek banking unit.

Fresnillo Plc dropped 5% and the largest silver miner lowered its interim dividend by 68% from a year ago after precious metal prices plunged this year.

InterContinental Hotels increased 3% after the hotel chain operator reported first-half increase increased to $340 million from $271 million a year ago.

Lanxess AG, the specialty chemical maker, declined 4% and extended its loss to 34% since it joined the DAX index in September, after the German company estimated earnings in the current year between 700 million euros and 800 million euros.

The company also said it is not likely to meet its operating earnings target of 1.4 billion euros for the next year.

Munich Re, the world’s largest reinsurer declined 4% after it reported second-quarter net declined 35% to 529 million euros from 808 million euros.

U.S. Stocks Review

American Eagle Outfitters Inc ((AEO)) dropped 16% after the teen apparel retailer reported lower than expected second-quarter earnings.

Fossil Group Inc soared 15% after the fashion accessories retailer reported higher than expected earnings and lifted its full-year earnings outlook.

IBM ((IBM)) decreased 2% after the technology company said employees in its hardware division will take one week off starting last week in August for one-third pay.

Washington Post Co increased 5% after the company agreed to sell Washington Post newspaper to Jeff Bezos, billionaire founder of Amazon.com, for $250 million. The company said it will still keep its education division and other businesses and plans to change its name.