US stocks mixed after disappointing manufacturing data

Stocks have traded in a narrow range today in New York, as investors digested a raft of earnings and disappointing manufacturing data from the Richmond Fed.

The Dow has advanced slightly, boosted by strong results from components DuPont and United Technologies, but the broader S&P has been dragged down by weak results elsewhere and indications of a contraction in manufacturing activity in the US central Atlantic region.

By early afternoon in New York the Dow had climbed 0.19% or 30 points to 15,575, after earlier setting a new record high of 15,604.22. Stocks had risen briskly after the opening, boosted by Dow components DuPont and United Technologies both beating earnings forecasts.

DuPont also disclosed that it is looking into selling or spinning off the performance chemicals part of its business. Travelers, the only insurer in the Dow, also exceeded expectations for its earnings, but saw its share price slide 3.4% after also revealing a significant decline in its net asset value caused by the falling value of its net unrealised gains of its portfolio of fixed-maturity securities.

The S&P 500 fell 0.03% to 1695.7, after also setting a record high earlier in the day.

Notable weakness for July in the Richmond Fed’s manufacturing index , which fell to -11 after May’s reading of +8, raises the question once again of how soon the Fed will be willing to begin to taper its monthly asset purchases. Analysts polled ahead of the report were expecting growth in manufacturing activity, with a consensus estimate of an unchanged level of +8. Instead activity has contracted sharply in the region, with new orders and shipments falling off a cliff. This makes tomorrow’s flash manufacturing PMI (which covers the whole of the US) all the more interesting, with another FOMC meeting just next week.

The US dollar has weakened today, with sterling rising 0.15% against the currency and the euro advancing 0.26%, as market participants speculated that the Fed will be in no hurry to take their foot off the stimulus pedal.

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