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Wall Street Slides to End Rough Week on Macro, Earnings Concerns

The Gilmer Free Press

The S&P 500 and Nasdaq posted their largest weekly drops since March on Friday as slowing global growth dragged commodity-related stocks lower while an earnings-fueled drop in Biogen took down the biotech sector.

Biogen (BIIB.O) more than halved its revenue growth forecast for 2015 and its stock lost 22% to close just above $300.

Stocks in the energy and materials sectors weighed heavily on the market after weaker-than-expected economic data from China and the euro zone raised concerns about global growth. Oil prices hit their lowest since March.

Amazon (AMZN.O) was the bright spot on Friday, rising more than 20% at one point and closing up 10% at $530.50. The online retailer posted an unexpected quarterly profit and its market cap ballooned to $247 billion, making it the tenth-largest U.S. company by market value.

However, Amazon’s spike highlighted the thinning of leadership in the S&P 500. Gains on the index so far this year can be attributed to Amazon and just three more companies.

At the close of trading on Friday, the Dow Jones industrial average .DJI fell 163.39 points, or 0.92%, to 17,568.53, the S&P 500 .SPX lost 22.5 points, or 1.07%, to 2,079.65 and the Nasdaq Composite .IXIC dropped 57.78 points, or 1.12%, to 5,088.63.

For the week, the S&P fell 2.2% and the Nasdaq slid 2.3% in their largest weekly drops since the last week of March. The 2.9% fall on the Dow was the largest for any week since January.

Selling in stocks accelerated after a report from the Wall Street Journal said Democratic presidential candidate Hillary Clinton will propose nearly doubling the U.S. capital gains tax rate on short-term investments.

Second-quarter S&P 500 earnings have been mixed, with 74% of companies beating analysts’ profit expectations but just 52% surpassing revenue expectations, according to Thomson Reuters data.

Adding to the concerns regarding lukewarm earnings, the S&P 500 is relatively expensive, trading at 16.9 times forward 12 months’ earnings, above the 10-year median of 14.7 times, according to StarMine data.

Dow component Visa (V.N) ended up 4.3% at $74.80 after the credit and debit card company’s results handily beat expectations.

Declining issues outnumbered advancing ones on the NYSE by 2,246 to 831, for a 2.70-to-1 ratio on the downside; on the Nasdaq, 2,144 issues fell and 660 advanced for a 3.25-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 13 new 52-week highs and 54 new lows; the Nasdaq Composite recorded 50 new highs and 200 new lows.

Some 7.3 billion shares changed hands on U.S. exchanges, above the daily average of 6.6 billion so far this month.

U.S. Jobless Claims Lowest Since 1973; Leading Index Rises

The Gilmer Free Press

The number of Americans filing new applications for unemployment benefits last week dropped to its lowest level in more than 41-1/2 years, suggesting the labor market maintained a sturdy pace of job growth in July.

Other data on Thursday also offered an upbeat assessment of the economy. A gauge of future economic activity increased solidly in June and another measure suggested growth picked up slightly last month.

The bullish jobs picture, together with a firming housing market brings the Federal Reserve a step closer to hike interest rates this year.

Initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 255,000 for the week ended July 18, the lowest level since November 1973, the Labor Department said.

However, last week’s drop likely exaggerates the strength of the labor market as claims are volatile during summer when automakers usually shut assembly plants for annual retooling.

Some firms keep production lines running, which can throw off a model the government uses to smooth the data for seasonal variations. A Labor Department analyst, however, said there were no special factors influencing the data.

Still, the decline unwound the increase in claims in June.

The dollar was trading weaker against a basket of currencies and prices for U.S. Treasuries fell marginally.

Technology shares on Wall Street rebounded from the prior sessions’ losses, while the rest of the market was little changed after weak earnings from Caterpillar (CAT.N), the world’s largest construction and mining equipment maker, and diversified technology firm 3M (MMM.N).

Fed officials meet next week, but they are not expected to tighten monetary policy before September. The Fed has kept its short-term lending rate near zero since December 2008.


FIRMING TREND

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 278,500 last week.

As such, that would suggest an acceleration in motor vehicle assembly this month, which would support the struggling manufacturing sector and lift industrial production.

The claims data covered the survey week for the non-farm payrolls portion of July’s employment report.

Though the four-week average of claims increased 1,500 between the June and July survey periods, payroll growth likely remained above the 200,000 threshold this month.

The four-week moving average of claims has been below the key 300,000 mark, which is normally associated with sturdy job gains, for 17 straight weeks - an unusually long stretch.

Payrolls increased 223,000 in June after rising 254,000 in May. Job growth has exceeded 200,000 in 14 of the last 16 months and at 5.3%, the unemployment rate is close to the 5.0% to 5.2% range that most Fed officials consider consistent with full employment.

In a separate report, the Conference Board said its Leading Economic Index rose 0.6% last month after advancing 0.8% in May. The increase reflected the strengthening housing market, which has been characterized by a surge in housing starts and building permits, as well as very strong sales.

The upbeat growth picture was also supported by another report from the Chicago Fed, which showed its National Activity Index rising to +0.08 in June after five straight months of negative readings. The gain was led by improvements in production and employment related indicators.

46 West Virginia Exporters, Sales to 85 Different Countries

The Gilmer Free Press

CHARLESTON, WV - Governor Earl Ray Tomblin today joined Department of Commerce Secretary Keith Burdette, the West Virginia Development Office and the West Virginia Export Council to present the Governor’s Commendation for International Market Entry to 46 West Virginia business exporters.

“When West Virginia businesses enter new markets around the world, they help foster trade opportunities, support job growth and diversify our economy here at home,“ Gov. Tomblin said. “Their ongoing success demonstrates West Virginia businesses and their employees can compete - and succeed - in the global marketplace.“

Since 2002, West Virginia has awarded commendations to honor companies that have successfully exported to a new country in the previous year. The Governor’s Commendation for International Market Entry award is a framed piece of currency from each new country to which the recipient business began exporting. The presentation is based on the tradition of displaying the first dollar a business earns.

West Virginia companies have entered export markets in diverse countries, from Albania to Venezuela. This year, the most new export sales to a single country went to the neighboring country of Canada, which provided a new export market for 11 West Virginia companies. Six companies received commendation awards for first-time exports to Trinidad and Tobago. Countries making first-time or rare appearances on the state’s export commendation roster are The Republic of Palau, Gambia and Djibouti.

Commendations were awarded to the following businesses:  

BERKELEY COUNTY

  • Power Sonix, Martinsburg. Product: Aircraft loud hailers. Country: Brunei.
  • Growth Media Services, Martinsburg. Product: Video production. Country: Trinidad and Tobago, Italy.
  • Channel Creasing Matrix Inc., Martinsburg. Product: Creasing matrix and die supplies. Country: Mexico, Canada, Hong Kong, Japan, Dominican Republic, Guatemala, El Salvador, Kuwait, Trinidad and Tobago, Ecuador, Venezuela.

BROOKE COUNTY

  • American Muscle Docks & Fabrication, Wellsburg. Product: Docks and marina accessories. Country: Bermuda, Bahamas, Singapore.
  • Eagle Manufacturing Company, Wellsburg. Product: Safety cabinets, safety cans, spill containment, material handling. Country: Brazil, Chile, Colombia, Costa Rica, Czech Republic, Ecuador, Guatemala, Honduras, India, Indonesia, Ireland, Jordan, Malaysia, Netherlands, New Zealand, Oman, Panama, Peru, Philippines, Qatar, Saudi Arabia, Taiwan, Thailand, Trinidad and Tobago, Uruguay, United Arab Emirates.
  • United States Gypsum Company, Weirton. Product: Paper-faced corner bead (building material). Country: Norway.

CABELL COUNTY

  • Crosscutting Concepts LLC, Huntington. Product: Education science kits. Country: Australia, Singapore, Japan, New Zealand.
  • Guyan International, Barboursville. Product: Equipment for mobile hydraulic applications. Country: Bangladesh, Bulgaria, Panama.
  • Hercules International Inc., Huntington. Product: Brake camshafts. Country: Canada.
  • Special Metals Corporation, Huntington. Product: Raw nickel alloys. Country: Saudi Arabia.

GRANT COUNTY

  • Allegheny Wood Products, Petersburg. Product: Hardwood lumber. Country: United Kingdom, Malaysia.

GREENBRIER COUNTY

  • ABB Inc., Lewisburg. Product: Online gas chromatographs and related instruments. Country: Latvia.
  • Falcon Analytical Systems & Technology LLC, Lewisburg. Product: Fast gas chromatographs. Country: Norway, Denmark, Italy, United Kingdom, China, Australia, Singapore, Canada, Albania, Saudi Arabia.

HARDY COUNTY

  • Peacock Manufacturing Company, Wardensville. Product: Custom cabinetry. Country: Anguilla, Bermuda, United Kingdom, Russia, Canada, Spain.

HARRISON COUNTY

  • FMW Rubber Products, Bridgeport. Product: Metal, polymer and rubber composites. Country: Israel.
  • Stockmeier Urethanes USA Inc., Clarksburg. Product: Polyurethanes. Country: Brazil.

JACKSON COUNTY

  • Constellium Rolled Products Ravenswood LLC, Ravenswood. Product: Aluminum products and solutions. Country: Romania, Israel, Christmas Island (Australian Territory).
  • J&M Industrial Inc., Millwood. Product: Used industrial equipment. Country: Dominica.
  • Niche Polymer LLC, Ravenswood. Product: Plastics compounding. Country: Canada.

JEFFERSON COUNTY

  • Bars and Booths.com Inc., Charles Town. Product: Diner furniture, custom bars. Country: Australia, Angola, Canada, France.

KANAWHA COUNTY

  • Cyclops Industries Inc., South Charleston. Product: Safety sight glass. Country: Czech Republic, Hungary, Oman.
  • Precision Samplers Inc., South Charleston. Product: Mechanical sampling system. Country: Canada.
  • Walhonde Tools Inc., Charleston. Product: Pipe and tube alignment tools. Country: France.

MARION COUNTY

  • Resolute Forest Products, Fairmont. Product: Recycled bleach kraft pulp. Country: Israel.

MARSHALL COUNTY

  • IMI Fabi LLC, Benwood. Product: Talc powder. Country: Mexico, China.

MASON COUNTY

  • ICL-IP America, Inc., Gallipolis Ferry. Product: Functional fluids and flame retardants. Country: Taiwan.

MERCER COUNTY

  • American Mine Research Inc., Princeton (headquartered in Virginia). Product: Mine monitoring and other controls for industrial operations. Country: Australia, South Africa, Canada, New Zealand.

MONONGALIA COUNTY

  • Gurkees®, Morgantown. Product: Rope sandals. Countries: Ireland, Australia, Sweden, Canada, Hong Kong, Singapore, United Kingdom.
  • ZEV Corporation, Westover. Product: Electric vehicles. Country: United Arab Emirates.

MORGAN COUNTY

  • Caperton Furnitureworks LLC, Berkeley Springs. Product: Wood furniture. Country: Estonia, Republic of Palau, Saudi Arabia.
  • Washington Homeopathic Products, Berkeley Springs. Product: Homeopathic products. Country: Greenland, Ireland, South Korea, Italy, Germany.

NICHOLAS COUNTY

  • Metalcraft Mining Equipment Rebuilders Inc., Fenwick. Product: Voest-Alpine Breaker Line Supports. Country: Australia.
  • Richwood Creations Inc., Summersville. Product: Wood products (kitchenwares). Country: Canada, Australia, United Kingdom.

OHIO COUNTY

  • TROY Group Inc., Wheeling. Product: Security printing products. Country: Gambia, Mali, Tanzania, Portugal, Romania, Antigua and Barbuda, Honduras, Uruguay.
  • Warwood Tool Company, Wheeling. Product: Heavy forged hand tools. Country: United Kingdom, Indonesia.
  • Wheeling Truck Center, Wheeling. Product: Truck parts. Country: Bulgaria, Federated States of Micronesia, Djibouti, Republic of Palau, Grand Cayman.

PRESTON COUNTY

  • Aquafix Systems Inc., Kingwood. Product: Water treatment equipment for acid mine drainage. Country: Tasmania.

PUTNAM COUNTY

  • Multicoat Products Inc. Winfield. Product: Construction coatings. Country: Jamaica.

RALEIGH COUNTY

  • American Airworks, Sophia. Product: Compressors, Boosters, Compressed Air Components, High Pressure Breathing Air-Oxygen Products. Country: Angola, Australia, Belgium, British Virginia Islands, British West Indies, Canada, Chile, Colombia, Czech Republic, Estonia, France, Germany, Ghana, India, Jordan, Kazakhstan, Kuwait, Malaysia, Mexico, Oman, Peru, Philippines, Saudi Arabia, Singapore, Switzerland, South Korea, South Africa, Taiwan, Trinidad and Tobago, Thailand, United Kingdom, United Arab Emirates.

TUCKER COUNTY

  • Thermo-Tech Inc., Davis. Product: Heaters for conveyor belts and related components. Country: Mongolia.

TYLER COUNTY

  • Marble King, Paden City. Product: Glass marbles. Country: Kenya.
  • Sistersville Tank Works, Sistersville. Product: Custom metal fabrication. Country: Trinidad and Tobago.

WOOD COUNTY

  • Baron Blakeslee SFC Inc., Williamstown. Product: Industrial cleaning systems. Country: Qatar, Ireland.
  • Kreinik Manufacturing Company, Parkersburg. Product: Fiber, yarn and thread mills. Country: Croatia, Rwanda.
  • Rolling Ridge Woods, Parkersburg. Product: Logs and lumber. Country: Canada.

Wall Street Falls for Third Day as Earnings Fall Short

The Gilmer Free Press

U.S. stocks fell for the third straight day on Thursday after disappointing corporate results and forecasts added to concerns about the U.S. profit outlook.

The Dow Jones industrial average fell back into the red for the year, with 3M (MMM.N), American Express (AXP.N) and Caterpillar (CAT.N) contributing the most to the average’s fall.

The Dow Jones transportation average .DJT was off 2.1%, with only one of its 20 components ending in the black. Union Pacific (UNP.N), down 5.7% at $92.12 after posting a lower quarterly profit, led the decline in transportation shares and was among the S&P 500’s biggest drags.

Caterpillar shares fell 3.6% to $76.88 and touched a four-year low. The world’s largest construction and mining equipment maker reported sales declines in key markets in a sluggish global economy.

American Express was down 2.5% at $77.01 after its revenue missed expectations, while diversified manufacturer 3M (MMM.N) was down 3.8% at $149.50 after cutting its full-year forecast.

The Dow Jones industrial average .DJI fell 119.09 points, or 0.67%, to 17,731.95, the S&P 500 .SPX lost 12 points, or 0.57%, to 2,102.15 and the Nasdaq Composite .IXIC dropped 25.36 points, or 0.49%, to 5,146.41.

After the bell, however, Nasdaq 100 e-mini futures NQc1 turned positive following results from Amazon (AMZN.O), whose shares jumped 18% in extended trading. Also jumping after the close, Visa (V.N) shares were up 7% following results.

During the regular session, all of the 10 major S&P 500 sectors were lower with the utilities index .SPLRCU leading the decline with a 1.5% fall along with the materials index .SPLRCM, also down 1.5%.

Dow Chemical’s (DOW.N) 5.2% drop to $47.45 weighed the most on the sector. Dow Chemical warned of soft demand in China after posting stronger-than-expected results.

Second-quarter S&P 500 earnings have been mixed, with 75% of companies so far beating analysts’ profit expectations and just 52% surpassing revenue expectations.

The S&P 500 is relatively expensive, trading at 16.9 times forward 12 months’ earnings, above the 10-year median of 14.7 times.

Qualcomm (QCOM.O) fell 3.8% to $61.78, a day after the chipmaker said it may break itself up as it delivered its third profit warning this year.

NYSE decliners outnumbered advancers 2,099 to 965, while on the Nasdaq, 1,908 issues fell and 869 advanced. The S&P 500 posted 31 new 52-week highs and 40 new lows; the Nasdaq Composite recorded 103 new highs and 143 new lows.

About 7 billion shares changed hands on U.S. exchanges, above the 6.5 billion daily average so far this month, according to BATS Global Markets.

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