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Midday Market Update

Stocks Mostly Lower; Wells Fargo, Trade Data in Focus

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U.S. Market
Stocks were mostly lower this morning as investors considered trade data and Wells Fargo earnings.

The U.S. trade gap unexpectedly increased 15.8% in November from October levels. Imports rose 3.8% with the biggest gains coming in consumer goods. Lower crude oil prices held down some of the increase. Exports were up 1% in the month.

Separately, the Labor Department reported today that import prices fell 0.1% in November due to lower oil prices. Excluding petroleum, import prices were up 0.1%. The report is a sign that inflation remain broadly in check.

At midday the Dow was flat while the S&P 500 and Nasdaq were each down 0.2%.

Stocks on the Move
 Wells Fargo (WFC) reported a better-than-expected 24% increase in its fourth-quarter profit this morning. However, the bank’s net interest margin shrank to 3.56% from 3.89% in the year-ago-quarter and 3.66% in the third-quarter. Analysts had expected a much more modest decline. Shares fell 1.3% on the report. 

Shares of  Boeing (BA) fell 2.2% after the Federal Aviation Administration said it was launching a probe in to the firm’s new 787 jet. The safety review comes after a week of incidents for the aircraft including a battery fire on Monday. Boeing said they are confident in the “reliability and performance” of the 787.

 Best Buy's (BBY) holiday sales update offered some hope that CEO Hubert Joly's Renew Blue plan could stabilize sales trends over the short run. Domestic comparable-store sales came in  flat for the two-month period ended Jan. 5, compared with consensus expectations calling for a 1.8% decline and the 4% decrease posted during the third quarter, which we chalk up to recent salesperson training initiatives and increased consumer awareness over price-matching efforts. Best Buy shares soared 12% on the news. 

Foreign Markets
European shares turned higher in late trading today. The FTSE 100 and Germany’s DAX were up 0.3% and 0.1% respectively while the Paris CAC was flat.

Asian markets were mixed after the Chinese government said that inflation hit a six-month high in November. The Shanghai Composite dropped 1.8%, the Hang Seng was off 0.4% while the Nikkei 225 was up 1.4%.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.