Stock Market Today: Why the Three-Day Rally is Losing Steam

After three days of gains that put the major U.S. indexes at their highest levels since May the stock market today opened slightly lower. Concerns over global productivity, the Eurozone debt crisis, and a comment by Federal Reserve Bank of Dallas President Richard Fisher have choked the short rally.

Fisher stated that adequate economic stimulus is in place and that global central banks may not have the capacity to undertake additional stimulus measures.

In the U.S., nonfarm productivity grew faster than expected during the second quarter, but still at a slow 1.6% annual rate. Economists had expected on average to see a 1.3% rate. The Labor Department also revised numbers from earlier this year and 2011 that showed productivity was better than originally thought.

Overseas, Standard & Poor's Rating Services on Tuesday lowered Greece's long-term credit outlook from "stable" to "negative." The rating agency said that Greece will need further aid from international lenders and needs to implement harsher austerity measures.

The outlook drop means Greece's credit rating, which remained at the junk status CCC, could be lowered in the near future if Greece does not receive additional funding.

England's central bank issued its quarterly inflation report Wednesday and it was not optimistic. The Bank of England cut its prediction for GDP growth this year from 0.8% to 0.0%. The bank also lowered its forecast for economic growth over the next two years from 2.6% to 2%.

"The economy will continue to face headwinds over the forecast period, from the fiscal consolidation and tight credit conditions at home, as well as from the difficulties in the euro area and a broader slowing in the world economy," Bank of England governor Sir Mervyn King said in a statement.

Companies Making Moves in the Stock Market Today

Here are some of the most watched headliners in the stock market today: Inc. (Nasdaq: PCLN), the biggest U.S. online travel agency by market value saw its shares tumble this morning after issuing a weak outlook for the current quarter.

Even though the Norwalk, CT-based company beat estimates for its second-quarter earnings, investors are punishing the stock due to the lower guidance for its third quarter.

Priceline's third-quarter profit excluding some items will be $11.10 to $12.10 a share in the current period, the company said yesterday. It expects sales to rise 9% to 15%, representing revenue of $1.58 billion to $1.67 billion. Analysts had expected third quarter adjusted EPS of $12.79 and sales of $1.8 billion, but the outlook isn't good for Priceline as economic uncertainty in Europe will continue to hurt its business.

"Guidance was a lot worse even off of lowered expectations," Herman Leung, an analyst at Susquehanna International Group, said in a research note.

For the second quarter Priceline reported adjusted EPS of $7.85, compared with $7.36 expected by analysts.

"Weak economic conditions and sovereign debt concerns further contributed to the level of deceleration experienced, particularly in our key European market, which represents about 60 percent of our total booked room nights," Priceline Chief Financial Officer Daniel Finnegan said on a conference call yesterday.

Shares of PCLN plunged more than 100 points Wednesday, down almost 16%.

Hewlett-Packard Company (Nasdaq: HPQ) raised its third-quarter earnings outlook and announced it will post an $8 billion write-down related to its IT services business formerly known as Electronic Data Systems Corp. The company acquired EDS in 2008 for $14 billion and since then the HPQ stock has fallen almost 60%.

H-P said that its earnings excluding some items, which are due out August 23, will now be $1.00, up from its previous forecast of $0.94 to $0.97.

The company also announced several executive changes. H-P named Mike Nefkens, current senior vice president and general manager of Enterprise Services for Europe, the Middle East and Africa, to lead the enterprises services division on an acting basis. It said former head John Visentin will leave the company to pursue other interests.

H-P also named Jean-Jacques Charhon, senior vice president and chief financial officer of the division, as its new chief operating officer.

"They're making changes, but it's going to be several years before they get it right," Shebly Seyrafi, an analyst at FBN Securities in New York, told Bloomberg News. "The charges are a recognition that the prior management strategy did not succeed."

HPQ stock was up more than 2.5% in early trading.

The Dow Jones today was up 27 points, or 0.21%, and the S&P 500 was up 2.18 points, or 0.16% as of noon.

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