Manufacturing declines for third straight month - The Institute for Supply Management's factory index contracted to 49.6 last month from 49.8 in July, its lowest level since July 2009. Economists are worried that the looming fiscal cliff could deter businesses from spending in the upcoming months. "As I look at this and try to find some rays of sunshine, it's quite difficult," Bradley Holcomb, chairman of the ISM survey, told Bloomberg News on a conference call. "I would characterize this as a sobering picture of U.S. manufacturing right now without any clear signs of immediate improvement."
Construction spending falls - Construction spending fell 0.9% in July to a seasonally adjusted annual rate of $834 billion, the Commerce Department said Tuesday. Economists had expected a 0.5% gain. Private residential construction fell 1.6%, private non-residential construction fell 0.9% and public construction spending fell 0.4%. Compared with July 2011 spending is up 9.3%.
Motor vehicle sales increase- Sales of pickups helped the auto industry continue its strong performance this summer. General Motors Co. (NYSE: GM) reported sales in August increased 10% from a year earlier, Ford Motor Co. (NYSE: F) sales rose 13% and Chrysler's 14%. Pickup sales led the way thanks to an increase in builder's permits and ground breaking on more projects. Sales of Ford's F-Series trucks jumped 19%, as did Chrysler's Ram. GM's Chevrolet Silverado, among the oldest trucks in the market, saw a 4% sales increase. When all of the automakers report August sales later today (Tuesday), the annual pace is expected to reach 14.2 million to 14.5 million vehicles, making August the second-best month for auto sales this year.
Smithfield Foods falls short of expectations - Smithfield Foods Inc. (NSYE: SFD) reported first-quarter net income of $61.7 million, or 40 cents per share, down from $82.1 million, or 49 cents per share, a year ago. Analysts had expected earnings of 44 cents per share. Revenue was $3.09 billion for the quarter, also missing analysts' average estimate of $3.15 billion. Smithfield, which is the largest U.S. pork and hog producer, cited the drought as a main factor for the miss. "We were disappointed with the poor performance of our fresh pork business, as the fresh pork complex remained under pressure due to higher supplies and weak domestic retail demand, although exports remained historically strong," said CEO C. Larry Pope. SFD stock was up 0.41% as of noon.
Campbell Soup reports strong earnings - The Campbell Soup Company (NSYE: CPB) reported better-than-expected profits and raised its full-year outlook. Net income was $127 million, or 40 cents per share, in the fourth quarter ended on July 31, up from $100 million, or 31 cents per share, a year earlier. Excluding acquisition-related costs, earnings were 41 cents per share, beating analysts' expectation of 39 cents per share. For fiscal 2013, the company projects adjusted earnings of $2.51 to $2.57 per share. Revenue is expected to increase between 10% and 12% to $8.48 billion to $8.64 billion. Analysts expect earnings of $2.52 per share on revenue of $8.47 billion. CPB stock was up 0.65% by 1 p.m. after initially going up 3%.
The Dow Jones was down 80 points, or 0.61%, and the S&P 500 was down 7.17 points, or 0.51% in afternoon trading.