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Midday Market Update

Stocks Mixed After Data

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U.S. Market    
After starting higher, coming off Tuesday's record-breaking close, stocks were mixed at midday as markets weighed economic data. 

 Automatic Data Processing's (ADP) February private-sector payrolls report showed a 198,000 increase in jobs, exceeding the expected 175,000 gain. The January reading was also revised upward, as were the November and December readings. Despite the outperformance in the ADP data, investors will be keeping a heavy watch on the Bureau of Labor Statistics' payrolls report Friday morning. 

The ADP report led to a drop in Treasury prices

Factory orders fell by 2% in January, though not by as much as the expected 2.3% loss. The defense and aviation industries saw significant monthly decreases, though that may be the result of higher spending toward the end of 2012 ahead of the so-called fiscal cliff. When excluding aircraft, orders for nondefense capital goods improved by 7.2%. 

Focus will also be on the Federal Reserve's Beige Book, scheduled for release this afternoon. 

The Dow was up by 0.1% at midday, but the S&P 500 and the Nasdaq were down by 0.1%. 

Stocks on the Move
Despite a 85% year-over-year increase in fourth-quarter earnings, American Eagle Outfitters (AEO) shares plunged by more than 10% after the retailer announced it expects its first-quarter earnings per share to be lower than Wall Street expectations and sees same-store sales to be weak, as well. 

 Staples (SPLS) posted a 72% decline in fourth-quarter earnings, with a profit of $78.1 million compared with $283.6 million the same time last year, though earnings increased when excluding one-time items. Revenue rose less than Street estimates to $6.57 billion. Shares were off by 6.6% at midday. 

 Williams Companies (WMB) and  Boardwalk Pipeline Partners (BWP) announced they will create a joint venture to transport natural gas liquids to various U.S. locations. The plan calls for transport capacity of 200,000 barrels a day. The firms also are reportedly interested in developing a liquefied petroleum gas terminal on the Gulf coast. Williams shares were 0.1% higher at midday, while Boardwalk shares were flat. 

After falling 10.7% Tuesday,  J.C. Penney (JCP) shares were down by another 3.1% after one of the firm's leading investors,  Vornado Realty Trust (VNO), confirmed reports that it sold 10 million J.C. Penney shares to Deutsche Bank (DB) in an effort for Vornado to avoid significant ongoing losses at the retail firm. Vornado shares were 1% lower at midday, and Deutsche Bank shares were 0.5% lower. 

Foreign Markets
Stocks in Asia cheered Tuesday's performance in Western markets and finished higher. The Shanghai Composite was 0.9% higher, while the Hang Seng gained 1.0%. The Nikkei 225 closed 2.1% higher. 

A late sell-off led to mixed performance in Europe. The FTSE 100 and the Paris CAC lost 0.1% and 0.4%, while the DAX gained 0.6%. 

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