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U.S. stocks open lower after positive trade data; Dow Jones down 0.56%

Published 08/06/2013, 09:43 AM
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Investing.com - U.S. stocks opened lower on Tuesday, after the release of positive U.S. trade balance data added to expectations for the Federal Reserve to soon scale back its bond-buying program.

During early U.S. trade, the Dow Jones Industrial Average dropped 0.56%, the S&P 500 index fell 0.23%, while the Nasdaq Composite index edged down 0.17%.

The Commerce Department said that the U.S. trade deficit narrowed by 22.4% to a seasonally adjusted USD34.2 billion from a deficit of USD44.1 billion in May.

Analysts had expected the U.S. trade deficit to narrow to USD43.5 billion in June.

The data showed that U.S. exports rose 2.2% in June to USD191.2 billion, while imports fell 2.5% to USD225.4 billion.

Online retailer Amazon.com declined 0.52%, after Chief Executive Officer Jeff Bezos agreed to buy the Washington Post for USD250 million.

In the tech sector, U.S. traded Sony shares plunged 4.04% after the company rejected billionaire Daniel Loeb’s call to sell a portion of its entertainment business, saying 100% ownership of the film and music units is crucial to the company's success.

IBM plummeted 2.37%, after the computer company said it's requiring the majority of U.S. employees in its hardware unit to take a week off with reduced pay, cutting costs as demand slows for products such as servers.

Elsewhere, Caterpillar added to losses, down 0.77%, amid reports it is being sued as Chairman Douglas R. Oberhelman and 13 directors failed to heed "red flags" that should have alerted them the company was overpaying for a Chinese mine-equipment maker.

Among earnings, Michael Kors surged 4.30% after the luxury retailer posted earnings that nearly doubled, boosted by gains in Europe.

Also on the upside, Fossil skyrocketed 14.32% after the fashion accessory maker posted better-than-expected earnings and lifted its full-year outlook.

Other stocks likely to be in focus included Disney, 21st Century Fox, Zillow and Office Max, scheduled to post results after the closing bell.

Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 added 0.10%, France’s CAC 40 rose 0.21%, Germany's DAX slipped 0.15%, while Britain's FTSE 100 dipped 0.03%.

During the Asian trading session, Hong Kong's Hang Seng Index tumbled 1.34%, while Japan’s Nikkei 225 Index jumped 1%.


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