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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
9/15/16
Price
8/15/16
Net
Change
PercentChange
52-Week
High
52-Week
Low
Shares
Outstanding
Market
Capitalization
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

 




About Margot Crabtree

Margot 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 tradetrendsonline.com.

 

 




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