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Stock Market Update for 09/29/2010

September 29, 2010

Stocks Move Mostly Lower In Mid-Morning Trading

Stocks are mostly lower in mid-morning trading on Wednesday amid a light day on the economic front. Despite the weakness in the markets, selling largely remains subdued ahead of tomorrow’s final reading on second quarter GDP and data on jobless claims.

The major averages have seen some further downside in recent dealing, setting fresh session lows. The Dow is currently down 47.42 points or 0.4 percent at 10,810.72, the Nasdaq is down 11.26 points or 0.5 percent at 2,368.33 and the S&P 500 is down 6.57 points or 0.6 percent at 1,141.13.

Profit taking is contributing to the modest weakness visible in the markets, with some traders cashing in on the strong upward move shown over the past.

Nonetheless, shares of Hewlett-Packard (HPQ) are trading higher in the early going after the company forecast fiscal 2011 adjusted earnings of $5.05 to $5.15 per share on revenues of $131.5 billion to $133.5 billion.

HP’s guidance is above analyst estimates, which called for fiscal 2011 earnings of $4.99 per share on revenues of $131.4 billion.

BP Plc (BP) is also in the spotlight today after announcing restructuring plans that include the creation of a safety unit with company-wide oversight.

In earnings news, Family Dollar (FDO) reported fourth-quarter net income of $0.56 per share, topping forecasts for $0.51 per share for the period. Net sales came in at $1.957 billion, just under the $1.96 billion expected for the period.

Family Dollar also announced $750 million in share repurchases along with guidance for fiscal 2011 that was roughly in line with forecasts.

In global economic news, data released in China revealed that manufacturing activity in the world’s second largest economy picked up to a 5-month high in September. However, activity was still well off the record high levels registered at the start of the year.

Markit Economics said the HSBC manufacturing purchasing managers’ index was at a seasonally adjusted 52.9, up from 51.9 in August. A reading above 50 indicates expansion.

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