US stocks edge mostly lower; Amazon soars on surprise profit

AP News
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Posted: Jul 24, 2015 9:42 AM
US stocks edge mostly lower; Amazon soars on surprise profit

NEW YORK (AP) — U.S. stock indexes are mostly lower in early trading, but Amazon soared after reporting a surprise profit.

With corporate earnings in full swing, several big companies were making sharp moves Friday after reporting their results.

Most notable was Amazon, which jumped 17 percent after surprising investors with a profit.

Elsewhere, Capital One sank 10 percent and Biogen plunged 17 percent after their results fell short of what analysts were expecting.

The Dow Jones industrial average was down 20 points, or 0.1 percent, to 17,712 as of 9:35 a.m. Eastern time.

The Standard & Poor's 500 index lost three points, or 0.2 percent, to 2,098. The Nasdaq composite edged up four points, or 0.1 percent, to 5,151.

Bond prices didn't move much. The yield on the 10-year Treasury note held steady at 2.27 percent.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

European stock markets held their ground Friday despite an earlier retreat in Asia where investors were spooked by further evidence of a sizeable economic slowdown in China.

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KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was unchanged at 6,656 while Germany's DAX was steady at 11,508. The CAC-40 in France outperformed its peers, trading 0.4 percent higher at 5,106. U.S. stocks were poised for a solid open, with Dow futures and the broader S&P 500 futures up 0.2 percent.

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CHINA WEAKNESS: The main movements took place in Asia after a closely watched indicator of China's manufacturing sector slumped to a 15-month low in July — contrasting recent indicators suggesting the outlook for the world's second-largest economy was stabilizing. The Caixin/Markit manufacturing index based on a survey of factory purchasing managers fell to 48.2 this month from 49.4 in June. It uses a 100-point scale on which numbers above 50 indicate expansion.

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ANALYST TAKE: "Just one week after investors reacted positively toward China's GDP attaining the government target at 7 percent, anxiety over the economic health of China has returned following the news that China's factor sector had contracted the most in 15 months," said Jameel Ahmad, chief market analyst at FXTM.

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ASIA SCORECARD: In the wake of the survey, China's Shanghai Composite Index sank 1.3 percent to 4,070.91. Japan's Nikkei 225 fell 0.7 percent to 20,544.53 and Hong Kong's Hang Seng shed 1.1 percent to 25,128.51. Australia's S&P/ASX 200 fell 0.4 percent to 5,566.10.

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GREECE TALKS: News that high-level talks between Greece and its European creditors on a third bailout for the cash-strapped country have been delayed until logistical matters are sorted out had little impact in European markets. Greek government spokeswoman Olga Gerovasili sought to downplay talk that security concerns are a reason why European negotiators won't now arrive in Athens until Saturday at the earliest. They had been expected Friday. The delay, she said, is related to "technical issues" and that the security of negotiators isn't one of them.

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FED WATCH: As well as monitoring developments in China and Greece, traders are turning their minds toward the U.S. Federal Reserve as they try to assess when the central bank will start raising interest rates. The market appears split between those who think it will happen in September or December. Ultra low interest rates have been a boon for stock markets worldwide for several years and the start of US rate hikes is likely to ruffle markets. The Federal Reserve Open Market Committee has a two-day policy meeting next week.

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MIXED EARNINGS: The U.S. corporate earnings reporting season is also in full swing. So far, American companies have mostly reported better-than-anticipated quarterly profits since the start of the month, but many have fallen short when it comes to revenue. Others have issued cautious outlooks, citing the strength of the dollar, a slowing economy in China or falling oil prices. That's giving investors reason to pause.

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ENERGY: Benchmark U.S. crude was up 20 cents at $48.65 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude was down 15 cents at $55.12 a barrel on the ICE futures exchange in London.

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CURRENCIES: The euro fell 0.4 percent to $1.0937 while the dollar rose 0.2 percent to 124.08 yen.