US stocks retreat despite strong manufacturing data

Shares have largely given up their gains from the morning session on Wall Street, with some notable earnings misses.

Trading on Wall Street began brightly today, with the Dow charging up as high as 16,649 earlier in the session, but by early afternoon in New York the gains had been surrendered, with the Dow up just 6 points at 15,552, while the S&P 500 and NASDAQ 100 both slipped into negative territory, down 0.05% and 0.32% respectively.

Chevron is the biggest decliner in the Dow today, after reporting a disappointing quarterly performance: the oil company suffered a surprise drop in profit, caused by lower margins for refined products. Earnings declined to $2.57 per share from $2.69 per share a year ago. $2.72 per share had been expected. Chevron’s share price has dropped 1.7% today, and with a price weighting of around 5% in the Dow, that’s single-handedly shaved well over 10 points from the index.

Overall earnings have been in good shape so far this quarter, though, with close to 69% of S&P 500 companies beating estimates from those that have reported so far.

The dollar is showing broad strength today, following surprisingly strong manufacturing data from the Institute of Supply Management. The ISM manufacturing index rose to 56.4 in October, edging up from September’s already-strong level of 56.2. New orders, the most forward-looking part of the index, was at a level of 60.6, the third time in a row that this component has come in above the 60 level, and backlog orders climbed above 50 for the first time since April.

The shutdown appears to have had little effect according to this report, and this tallies with yesterday’s very strong Chicago PMI report, although notably Markit’s PMI manufacturing index does show signs of decline.

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