11:10 AM New York – U.S. stocks rebounded after the service industry expanded at the fastest pace in five months. Berkshire Hathaway increased after reported higher than expected quarterly net. European markets closed flat and Asian markets were on the defensive.
Stocks on Wall Street rebounded after the release of service industry data.
S&P 500 index declined 2.66 to 1,707.05 and the Nasdaq Composite Index fell 3.90 to 3,685.69.
A private survey showed service industry expanded at the fastest pace in five months in July, however the expansion is moderate.
The Institute for Supply Management said its non-manufacturing index increased to 56 in July from a nearly 3-year low of 52.2 in June.
The measure of orders in the industry increased to 57.7 in the month from 50.8 in the previous month, and business activity index shot up to a record high in the year to 60.4 from 51.7.
European markets were flat in thin trading and the latest read on service sector showed a shrinkage at a slower pace than initially estimated in June and a measure of UK service growth increased more than expected to the record level in six years.
HSBC decreased 5% after first-half net rose 10% to $10.28 billion on the decline in U.S. loan impairment. The bank said in a statement mainland China market slowed unexpectedly in first quarter and growth slowed in Latin American markets.
PostNL dropped 10% after the Amsterdam based courier company said second-quarter sales were less than expected 1.03 billion euros.
Thomas Cook increased 5% after two analysts lifted views on the stock and highlighted cost savings.
In Asia wide trading, market indexes were subdued after the U.S. reported less than expected increase in employment.
The yen gained and Nikkei index halted a 2-day rally after Toyota reported near record earnings but issued a cautious outlook and highlighted slowing sales in emerging markets.
New Zealand dollar declined after its largest dairy company Fonterra Co-Operative Group, the world’s largest dairy exporter’s milk powder banned in China.
The dairy company stock earlier decreased 3% after the company said some of its products may contrail botulism which can cause severe food poisoning.
Chinese milk products companies soared in Hong Kong trading after the ban and Biostime International soared 10% and China Modern Dairy Holdings surged 9.6%.
In Hong Kong, Hang Seng index increased 0.1% and Shanghai Composite Index gained 1% and investors are looking ahead for the economic update at the end of the week and the release of inflation and industrial production data.
In Mumbai, rupee rebounded slightly to close at 60.78 against one dollar and the Sensex index 0.1%.
U.S. Stocks in Review