Rally Fades as Wall Street Envisions Rate Hikes
Originally published: 09.16.16 by Margot Crabtree
The fever pitch of July and early August cooled as investors began to chew on variable comments from Federal Reserve members about the possibility of upcoming interest rate hikes. Profit-taking intensified the wobble and investors were also wary of elevated stock values.
Federal Reserve data showed that industrial production rose 0.7 percent in July; economists surveyed by Reuters expected an upswing of 0.3 percent. It was the largest gain this year.
The Conference Board said that U.S. consumer confidence rose in August to 101.1, from 96.7 in July. It was the highest level for the index since a reading of 102.6 in September 2015. Strong consumer spending boosted the possibility of a rate hike after the Commerce Department reported that spending increased 0.3 in July, after an uptick of 0.5 percent in June. The numbers were in line with expectations.
The Commerce Department reported that housing starts were unexpectedly strong in July; they improved by 2.1 percent, while they were expected to decline. The National Association of Home Builders/Wells Fargo builder sentiment index came up 2 points from a downwardly revised reading of 58 in July.
The National Association of Realtors said that sales of existing homes fell in July, but the Commerce Department said that new home sales jumped unexpectedly in July, up 12.4 percent, and the highest rate since October 2007. The Commerce Department said that overall construction spending remained the same in July; home building and non-residential construction were strong, but government spending declined.
Payroll processor ADP said businesses added a solid 177,000 jobs in August, including in higher paid jobs like those for accountants, engineers and architects.
The Labor Department, however, said that employers hired only 151,000 in August, compared to July’s 275,000 and June’s 271,000, and further muddied the waters after their report showed a record 5.87 million job openings in July, above a previous record in April and the highest since records were established in December 2000. Data coming in as our trading session ended pointed to a later rate hike.
“They’re not going to raise interest rates in September,” said Karyn Cavanaugh, senior market strategist for Voya Investment Strategies. “It was kind of a mixed bag, but the bottom line is that the data’s not great.”
Exchange |
Symbol |
Company Name |
Price
|
Price
|
Net
|
PercentChange |
52-Week
|
52-Week
|
Shares
|
Market
|
| NASD | AAON | AAON, Inc. | 27.56 | 27.32 | 0.24 | 0.88% | 29.23 | 18.85 | 52920 | 1458475.2 |
| NYSE | ABB | ABB Ltd. | 22.25 | 22.13 | 0.12 | 0.54% | 22.78 | 15.74 | 2160000 | 48060000 |
| NYSE | AOS | AO Smith Corp. | 93.28 | 94.75 | -1.47 | -1.55% | 98.38 | 60.30 | 74130 | 6914846.4 |
| NYSE | FIX | Comfort Systems USA, Inc. | 26.62 | 29.21 | -2.59 | -8.87% | 35.00 | 24.22 | 37130 | 988400.6 |
| NYSE | DOV | Dover Corp. | 68.60 | 74.44 | -5.84 | -7.85% | 74.90 | 50.91 | 155220 | 10648092 |
| NASD | ELON | Echelon Corp. | 5.12 | 5.19 | -0.07 | -1.35% | 7.50 | 4.41 | 4430 | 22681.6 |
| NYSE | DD | E. I. DuPont de Nemours & Co. | 67.56 | 68.64 | -1.08 | -1.57% | 75.72 | 47.11 | 874330 | 59069734.8 |
| NYSE | EME | EMCOR Group, Inc. | 56.23 | 57.28 | -1.05 | -1.83% | 58.50 | 40.98 | 60800 | 3418784 |
| NYSE | EMR | Emerson Electric Co. | 51.58 | 54.71 | -3.13 | -5.72% | 56.82 | 41.25 | 643540 | 33193793.2 |
| NYSE | FCAU | Fiat Chrysler | 6.52 | 6.96 | -0.44 | -6.32% | 10.89 | 5.45 | 1290000 | 8410800 |
| NYSE | F | Ford Motor Co. | 12.11 | 12.43 | -0.32 | -2.57% | 15.84 | 11.02 | 3980000 | 48197800 |
| NYSE | GM | General Motors Co. | 31.12 | 31.86 | -0.74 | -2.32% | 36.88 | 26.69 | 1570000 | 48858400 |
| NYSE | HON | Honeywell International, Inc. | 115.28 | 116.84 | -1.56 | -1.34% | 120.02 | 91.57 | 760880 | 87714246.4 |
| NASD | HDSN | Hudson Technologies, Inc. | 5.71 | 5.37 | 0.34 | 6.33% | 6.60 | 2.64 | 33610 | 191913.1 |
| NYSE | IR | Ingersoll-Rand Plc | 63.83 | 68.30 | -4.47 | -6.54% | 68.97 | 47.08 | 258000 | 16468140 |
| NYSE | JCI | Johnson Controls, Inc. | 44.28 | 46.41 | -2.13 | -4.59% | 50.65 | 31.73 | 637750 | 28239570 |
| NYSE | LII | Lennox International Inc. | 156.44 | 157.76 | -1.32 | -0.84% | 164.02 | 105.65 | 43470 | 6800446.8 |
| NYSE | LXU | LSB Industries, Inc. | 8.51 | 11.66 | -3.15 | -27.02% | 23.08 | 3.68 | 27940 | 237769.4 |
| NYSE | MTW | Manitowoc Co., Inc. | 4.38 | 4.81 | -0.43 | -8.94% | 17.68 | 4.00 | 137020 | 600147.6 |
| NYSE | MLI | Mueller Industries, Inc. | 32.33 | 34.48 | -2.15 | -6.24% | 35.52 | 23.09 | 57170 | 1848306.1 |
| NYSE | NWL | Newell Rubbermaid, Inc. | 50.83 | 54.89 | -4.06 | -7.40% | 55.45 | 33.26 | 482200 | 24510226 |
| OTC | NSANY | Nissan Motor Co. Ltd. | 19.72 | 19.74 | -0.02 | -0.10% | 21.92 | 16.57 | 2100000 | 41412000 |
| NASD | NTK | Nortek, Inc. | 85.94 | 85.99 | -0.05 | -0.06% | 88.30 | 33.85 | 16310 | 1401681.4 |
| NASD | OFLX | OmegaFlex, Inc. | 37.11 | 35.47 | 1.64 | 4.62% | 43.20 | 27.51 | 10090 | 374439.9 |
| NYSE | PH | Parker-Hannifin Corp. | 122.56 | 124.12 | -1.56 | -1.26% | 125.00 | 83.32 | 133900 | 16410784 |
| NYSE | RBC | Regal-Beloit Corp. | 57.74 | 64.18 | -6.44 | -10.03% | 68.45 | 47.77 | 44750 | 2583865 |
| NYSE | ROK | Rockwell Automation | 115.45 | 118.86 | -3.41 | -2.87% | 120.75 | 87.53 | 129400 | 14939230 |
| OTC | SIEGY | Siemens Aktiengesellschaft | 119.08 | 119.47 | -0.39 | -0.33% | 122.84 | 86.58 | 808890 | 96322621.2 |
| NYSE | SPXC | SPX Corp. | 19.57 | 18.40 | 1.17 | 6.36% | 20.52 | 7.62 | 41610 | 814307.7 |
| NYSE | TXN | Texas Instruments | 69.22 | 70.33 | -1.11 | -1.58% | 72.58 | 45.33 | 1000000 | 69220000 |
| NYSE | UTX | United Technologies Corp. | 102.71 | 109.69 | -6.98 | -6.36% | 109.83 | 83.39 | 836930 | 85961080.3 |
| NYSE | WSO | Watsco, Inc. | 143.71 | 146.13 | -2.42 | -1.66% | 149.99 | 106.58 | 27530 | 3956336.3 |
The HVACR Business Stock Index slid in tandem with the national markets, down 29.24 points, or 2.30 percent, and closing at 1240.56. Declining issues definitively overpowered advancing issues by a 27-to-5 count.
United Technologies tumbled 6.98 points, or 6.36 percent. Investment firm Wells Fargo & Co. re-stated its rating of “outperform.” Analysts at JPMorgan Securities cut their price target to $106, from $109. UTX ended at 102.71, and was the top dollar loser.
Despite a downgrade, SPX Corp rose 1.17 points, or 6.36 percent, and was our top dollar gainer. Zacks Investment Research cut its rating on SPXC to “hold,” although analysts at UBS reiterated their rating of “buy.” Their price target is $23. SPX Corp ended at 19.57.
LSB Industries slid 3.15 points, or 27.02 percent. Zacks Investment research cut its rating on LXU to “sell” from “hold.” LXU closed at 8.51, and was the top percentage loser.
Margot Crabtree is president of Trade Trends, Inc., a financial data services provider. She has been offering market analysis with customized stock indices and financial commentaries since 1999. For additional information, visit www.tradetrendsonline.com.