RTTNews - Following a retreat at the opening bell, stocks are posting notable losses in mid-morning trading on Wednesday, as disappointing data on activity in the service sector deflated the mood on Wall Street. The major averages are all in negative territory, offsetting some of their recent gains.

The day's pessimism has been generated by the Institute for Supply Management's report on activity in the service sector in the month of July, which showed that the pace of contraction in the sector unexpectedly accelerated from the previous month.

The ISM said its index of activity in the sector edged down to 46.4 in July from 47.0 in June, with a reading below 50 indicating a contraction in the sector. The decrease came as a surprise to economists, who had expected the index to rise to 48.0.

In a separate report, the U.S. Commerce Department revealed that factory orders rose 0.4 percent in June, surprising economists, who had expected the measure to drop 0.8 percent. May's factory orders figure was revised slightly lower, to an increase of 1.1 percent compared to the 1.2 percent increase that was originally reported.

Earlier this morning, a report released by payroll processor Automatic Data Processing (ADP) showed that private sector employment saw another notable decline in the month of July, although the pace of job losses slowed to its slowest rate since October of 2008.

ADP said non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.

In earnings news, Procter & Gamble Co. (PG) reported fourth quarter net income of $0.80 per share, compared to $0.92 per share in the same quarter of last year. Wall Street analysts expected the company to report earnings of $0.79 per share for the quarter. Meanwhile, net sales came in at $18.66 billion for the quarter, falling short of the $19.32 billion forecast by analysts.

Kraft Foods Inc. (KFT) said its second quarter net income was $0.56 per share, compared to $0.49 per share in the year ago quarter, which edged out analyst estimates of $0.54 per share.
Revenues declined 5.9 percent to $10.2 billion, failing to meet estimates of $10.37 billion.

Traders are also digesting results from Ralph Lauren (RL) and Electronic Arts (ERTS), which reported quarterly results that beat forecasts, while Dean Foods (DF) came in line with estimates and lifted its full year outlook.

The major averages have moved off of their worst levels of the day in recent trading, but they remain stuck in negative territory. The Dow is currently down by 94.16 at 9,226.03, the Nasdaq is down 21.62 at 1,989.69 and the S&P 500 is down 9.90 at 995.75.

Sector News

The major sectors are moving mostly lower, contributing to the downward move being shown by the broader markets.

Some of the day's weakest performances are being turned in by oil service and gold stocks, with the Philadelphia Oil Service Index and the NYSE Arca Gold Bugs Index sliding by 2.6 percent and 2 percent, respectively. The downward moves come amid a retreat in commodity prices following the recent run-up.

Trucking stocks are also retreating by notable margins, as reflected by the 1.8 percent loss being shown by the Dow Jones Trucking Index. The index is backing further off of the ten-month closing high set on Monday.

While steel, telecommunications, tobacco, and semiconductor stocks are also posting notable losses, some banking stocks are bucking the day's downtrend. The Dow Jones Banking Index is currently up by 1.4 percent after setting a seven-month intra-day high earlier in the session.

Stocks Driven By Analyst Comments

Tyson Foods (TSN) is sliding in mid-morning trading after being downgraded by KeyBanc Capital Markets from Buy to Hold. The stock is down by 4.5 percent, falling to a three-month intraday low.

Oshkosh (OSK) is also retreating following a downgrade by KeyBanc Capital Markets. The broker lowered its rating on the stock to Hold from Buy. Shares of the diversified vehicle manufacturer are down by 5 percent, backing off of their best closing price in over one year.

On the other hand, Brinker International (EAT) is moving higher after being upgraded by UBS from Neutral to Buy. The stock is up by 3.3 percent, reaching its best intraday price in nearly two months. The firm is slated to report earnings before the markets open on Thursday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished Wednesday's trading markedly lower. Hong Kong's Hang Seng Index posted a loss 1.5 percent, while Japan's benchmark Nikkei 225 Index ended the session down by 1.2 percent.

Meanwhile, the major European markets are mixed, with the French CAC 40 Index and the German DAX Index sliding by 0.4 percent and 1 percent, respectively, while the U.K.'s FTSE 100 Index is up by 0.2 percent.

In the bond markets, treasures have pared earlier losses and have climbed into positive territory, Subsequently, the yield on the benchmark ten-year note is trading at 3.673 percent, posting a loss of less than a basis point on the day.

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