Stocks were off to a slow start on Wall Street Tuesday after FedEx said it's seeing more weakness in the global economy. Markets in Europe fell, and so did oil prices.
The Dow Jones industrial average was up 10 points to 13,564 in late morning trading, but the broader Standard & Poor's 500 index fell a point to 1,460. The Nasdaq composite lost two points to 3,178.
FedEx delivers packages worldwide, so its assessment of the global economy carries a lot of weight with investors. On Tuesday it said it was seeing recession-like conditions, and that the worldwide economy was in a "stall."
FedEx reduced its fiscal-year profit forecast sharply because its customers were using its express air delivery service less in favor of slower and cheaper ground service. FedEx's stock fell $1.60 to $87.68.
Apple climbed above $700 for the first time, after closing on Monday at $699.78. Apple shares have risen more than 19 percent in the past three months. Its recent gain has been driven by strong sales of its new iPhone and related gadgets.
Among the 10 industry groups in the S&P 500, only consumer staples and health care stocks rose. Energy and consumer discretionary stocks each fell a half percent.
Most retail stocks fell. Target fell 51 cents to $63.90 and Bed Bath & Beyond gave up $1.61 to $69.16.
Markets had rallied sharply last week after the Federal Reserve announced aggressive measures intended to kick-start the economy. This week, investors have been more focused on the weak growth that caused the Fed to act in the first place.
Also on Tuesday, the Commerce Department reported that the current account deficit dropped 12.1 percent in the second quarter. That's down from a record high in the January-through-March quarter. The deficit shrank because of an increase in American exports and cheaper oil. But economists are predicting it will grow again because of the global slowdown.
Oil prices fell 25 cents to $96.37 on the New York Mercantile Exchange. Oil had hit $100 per barrel in recent days but dropped $4 per barrel in late trading Monday. The drop looked like a trading glitch at first, but with prices continuing lower on Tuesday it began to look more like a legitimate sell-off as concerns about the lethargic economy persisted.
Stocks fell in Europe, too. The CAC-40 in France was down 1 percent, the FTSE-100 in Britain fell a half-percent, and the DAX in German was down 0.6 percent.
Source: http://news.yahoo.com/stocks-slip-fedex-gives-glum-outlook-151251451--business.html
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