By Anora Mahmudova and Carla Mozee, MarketWatch
Employment cost index rises more than expected
NEW YORK (MarketWatch) -- The Dow Jones Industrial Average
opened with a triple-digit decline Thursday, as investors weighed
the implications of robust economic growth and signs of rising wage
inflation on Federal Reserve policy.
The main benchmarks were on track to finish the volatile month
mostly flat.
The S&P 500 (SPX) opened 14 points, or 0.7%, lower at
1,956.19. The Dow Jones Industrial Average (DJI) dropped 123
points, or 0.7%, to 16,757.06. The Nasdaq Composite (RIXF) lost 34
points, or 0.8%, to 4,429.36.
Follow MarketWatch's live blog of today's stock-market
action.
Weekly jobless claims rose slightly less than expected a week
after hitting a 14-year low. However the employment cost index rose
due to a larger-than-expected increase in wages. Many analysts
watch for wage inflation as a precursor to inflation.
Investors will continue to focus on company earnings. Also in
the spotlight is Argentina. Standard & Poor's Ratings Services
declaring the country in selective default after talks aimed at a
settlement between Argentina and holdout creditors fell apart late
Wednesday.
"The markets seem to be digesting a lot of the data from
[Wednesday] along with the Fed statement. Even though there is a
good chance we'll see a revision to what was a surprisingly good Q2
GDP number, this does raise the specter of monetary tightening in
less than a year," said Brenda Kelly, chief market strategist at
IG, in emailed comments.
International concerns
Concerns about the health of Europe's banking sector was a drag
on Wall Street, as shares of Banco Espírito Santo SA in Lisbon sank
as much as 50% after the Portuguese lender reported a record
second-quarter loss.
A reading on July business conditions in the Chicago area is due
at 9:45 a.m. Eastern Time, and economists are looking for the
Chicago PMI to rise to 63.5, from 62.6 in June.
Corporate news
Among individual stocks, Time Warner Cable Inc.'s (TWC)
second-quarter results surpassed Wall Street's estimates.
Exxon Mobil (XOM) profit climbed 28% and beat estimates. Shares
fell 1.4% however.
Avon (AVP) said second-quarter profit fell on lackluster sales,
particularly in Latin America and North America.
After the bell, Tesla Motors (TSLA) will release quarterly
results.
Shares in Synchrony Financial begins trading Thursday after the
giant initial public offering was priced at $23, the low end of
expectations. (Read more about the day's notable movers here:
http://www.marketwatch.com/story/whole-foods-gopro-and-tesla-are-stocks-to-watch-thursday-2014-07-31.)
In the commodities market, crude-oil futures (CLU4) fell below
$100 a barrel on bearish U.S. inventory data, while gold futures
(GCQ4) turned lower.
European stocks fell, and Asian equities closed mixed, with
Japan's Nikkei Average ending down by 0.2%.
More must-reads from MarketWatch:
Are Argentine bonds in your fund?
Sony surprises as operating profit nearly doubles
How much did subprime loans fuel the GDP boom?
Subscribe to WSJ: http://online.wsj.com?mod=djnwires