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Monday, December 5, 2022
HomeNewsEconomyStocks Shed Gains After New Orders Of Manufactured Durable Goods Fall

Stocks Shed Gains After New Orders Of Manufactured Durable Goods Fall

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American workers at a manufacturing plant for long-lasting durable goods. (PHOTO: REUTERS)

U.S. stocks fell sharply Wednesday after a gauge of industrial orders unexpectedly fell last month. The Commerce Department reported Wednesday that new orders for manufactured durable goods in February decreased $3.2 billion or 1.4 percent to $231.3 billion.

At 1:26 a.m. EDT (1515 GMT), the Dow Jones industrial average (INDEXDJX:.DJI) fell 220 points, or 1.23 percent, to 17,790, the S&P 500 (INDEXSP:.INX) lost 19 points, or .93 percent, to 2,072 and the Nasdaq Composite (INDEXNASDAQ:.IXIC) dropped 87 points, or 1.76 percent, to 4,907.

A drop in durable goods orders pushed the dollar (USDUSD) down 0.2 percent after falling by as much as 0.7 percent, as it eases fears that the rally in the U.S. currency will hurt domestic corporate earnings.

“The dollar strength can sap earnings growth, but if you continue to see soft economic data here, a confirmation of decelerating growth, that will certainly affect the market,” said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

With the S&P 500’s forward price-to-earnings ratio over 17 and at its highest since late 2007, “you have to torture the numbers to make a bull case at this point.”

The dollar index <.DXY> was down 0.2 percent after falling earlier as much as 0.7 percent.

Meanwhile, Kraft Foods (NASDAQ:KRFT) shot up 42 percent to $86.90 after a merger agreement with ketchup maker H.J. Heinz Co, owned by 3G Capital and Berkshire Hathaway (NYSE:BRK.A). Kraft Heinz Co will trade publicly and will be the third-largest food company in North America.

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