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Here are the major headlines in the stock market today.
- Capital goods orders declines most in 8 months- Orders for core capital goods which excludes transportation and defense dropped 3.4% in July, the biggest decline since November. Capital goods such as computers, engines, and communication equipment are thought to be key indicator of business spending and this drop certainly does not inspire any confidence in the economy. "There's uncertainty domestically about the tax environment, and there's uncertainty globally about the outcome of the European crisis," Millan Mulraine, a senior U.S. strategist at TD Securities in New York told Bloomberg. "This is not engendering business investment and hiring." Economists had expected this category to rise 0.7% after a previously reported 1.7% decline in June.
- Durable goods orders rise– Manufactured goods which are expected to last at least three years, increased 4.3% in July fueled by airline and auto sales. Economists had expected on average a 2.5% increase. Overall orders last month were lifted by a 14.1 % jump in transportation equipment as demand for civilian aircraft surged 53.9%. This was led by Boeing Co. (NSYE: BA) which had a strong performance at the Farnborough Air Show and received orders for 260 aircraft, up from 24 planes in June. Motor vehicle sales increased 12.8%, the largest increase since last July. Yet omitting the transportation sector, orders fell 0.4% and declined for the second month in a row.
- Eli Lily & Co. (NSYE: LLY) Alzheimer's drug shows promise- Even though the trial for Eli Lily's Alzheimer drug did not achieve its two primary goals it did slow the decline of cognition in some patients. The drug, solanezumab, delayed the worsening of mental loss in a sub-analysis of patients in the earliest stage of the disease but did not restore thinking, memory, or daily activities in any of the groups studied. The fact that the drug had some positive effect was encouraging as analysts had given the drug a less than 20% chance of showing any benefit. Most experts expect another trial will be needed before the U.S. Food and Drug Administration will consider approval. "People expected nothing, and instead we have some hints of efficacy," said Mike Krensavage, founder of New York-based Krensavage Asset Management. "The right thing now is probably TO do another trial." LLY stock is up over 4% in early trading.
- Autodesk Inc. (Nasdaq: ADSK) falls on weak earnings report- Autodesk, maker of architectural and engineering software, reported non-GAAP profits of 48 cents a share which was a penny below expectations. Revenue for the second quarter was $569 million, up just 4% from a year ago, and well off analysts' expectations of $593.4 million. What is really hurting the stock today is the lower guidance Autodesk issued for the remainder of the year. For its fiscal third quarter Autodesk sees revenue of $550 million to $570 million and non-GAAP profits of 40-45 cents a share, falling short of Wall Street's projections of $601.2 million and 50 cents. The company now sees full year revenue growth of 4%-6% compared to its previous forecast of 10%. ADSK stock is down more than 16% in early trading.
- The Madison Square Garden Co. (Nasdaq: MSG) rises- The owner of the New York Knicks and Rangers reported a strong fiscal fourth quarter, boosted by those teams increased playoff-ticket sales. Net income more than tripled to $28.6 million, or 37 cents a share, from $8.53 million, or 11 cents, a year earlier and was ahead of analysts' forecast of 20 cents per share. MSG stock is up over 5% in early trading.
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