James Bullard, the Fed Bank of St. Louis President, said today on CNBC the minutes of this month’s meeting were no longer as relevant because the U.S. economy has picked up in the past month. Earlier today, Fed Bank of Chicago President Charles Evans said in Beijing that easing policies would support economic growth around the world, including in China, broadening his call for more stimulus in the U.S.
Purchases of new U.S. homes rose more than projected in July. Sales climbed 3.6 percent to a 372,000 annual pace, compared with the median estimate of 365,000. A separate report showed the number of applications for unemployment benefits climbed last week to a one-month high, showing little progress in the labor market. Jobless claims rose for a second week to reach 372,000. The median forecast called for 365,000.
A Chinese report today indicated that manufacturing will contract at a faster pace in August, signaling the country’s economy needs more stimulus to secure a rebound in growth. The preliminary reading for a purchasing managers’ index for China was 47.8. If confirmed, it would be the weakest level since November and the 10th month that the reading has stayed below 50, the longest run in the index’s eight-year history.
Hewlett-Packard, the biggest maker of personal computers, dropped 8 percent to $17.66 for the biggest decline in a year. Profit excluding some costs will be $4.05 to $4.07 a share in the year that ends in October, Palo Alto, California-based Hewlett-Packard said yesterday in a statement. That’s at the low end of a forecast for $4.05 to $4.10 issued in May and below the average $4.08 analyst estimate compiled by Bloomberg.
The company suffered another quarter of slumping demand for personal computers and services aimed at businesses, underscoring the turnaround challenge facing Chief Executive Officer Meg Whitman.
Other technology stocks also declined. Intel Corp., the world’s largest chipmaker, slid 2.5 percent to $25.09, while Microsoft Corp., the biggest software maker, slumped 1 percent to $30.25.
Big Lots, the Columbus, Ohio-based discount retailer, plunged 24 percent to $29.57 for the biggest drop in the S&P 500. Profit excluding some items will decline to $2.80 to $2.95 a share this year, reduced from a previous projection of $3.25 to $3.40 a share. Analysts anticipated $3.30, the average of 16 estimates compiled by Bloomberg.
Boeing slumped 2.7 percent to $70.82, after losing 35 orders for 787-9 planes, the biggest Dreamliner cancellation, as Qantas Airways Ltd. scrapped a contract after delivery delays and losses on international routes. Qantas’s pullback on jets worth about $8.5 billion at current list prices reduced Chicago- based Boeing’s backlog for the 787-9 by about 10 percent.
Raw-material stocks fell 1.5 percent for the biggest drop out of 10 groups in the S&P 500. Alcoa, the largest aluminum producer in the U.S., erased 2.3 percent to $8.67, while DuPont Co., the most valuable U.S. chemicals producer, lost 0.9 percent to $50.35.
Patterson Cos. tumbled 5.3 percent to $34.02. The St. Paul, Minnesota-based maker of medical devices for dental and veterinary clinics reported first-quarter earnings of 45 cents a share, missing the average analyst estimate by 4 cents.
Guess? Inc., an apparel maker that operates 511 stores in the U.S. and Canada, sank 23 percent to $25.76 after cutting its annual profit and revenue forecasts amid a drop in North American store sales. Comparable-store sales, a measure of a retailer’s growth that excludes new stores, fell 8.5 percent in the quarter ended July 28.