Markets were relatively flat on Wednesday after U.S. factory orders were up in July. The Commerce Department reported that factory goods orders rose a record 10.5% in July, and June’s data was up upwardly revised from the previous 1.1% to 1.5%. The gain was the largest recorded since 1992. The jump in July was still below the 11% increase economists were expecting. There was a four-fold increase in orders for civilian jets, which was a driving force for the jump. The report also revealed that durable goods orders were up 22.6%. Durable goods are items that will last for at least three years. Nondurable goods orders dropped 0.9%.
Shares of CVS Caremark Corporation (CVS) were on the rise after the company announced its plans to hone in on their health conscious brand. CVS Caremark will be changing their name immediately to CVS Health. The signage for the 7,700 stores will no be changing. They will also stop selling all tobacco products a month sooner than they planned. In place of the tobacco section, the store will have nicotine gum and signs to urge people to stop smoking. Larry Merlo, CEO of CVS said, “We’re doing more and more to extend the front lines of health care.” The move away from tobacco products will cost the company roughly $2 billion in annual revenue, however they believe that they will offset that loss through growth from their focus on healthcare.
Chrysler Group announced auto sales hit their 53rd month of consecutive sales gains in August with a 20% increase. They hit sales of 198,379 vehicles last month. Sales were up 19.8% from this time last year. The company said that the gain was largely attributed to a 48.7% rise in sales of the Jeep SUV. Jessica Caldwell, senior analyst with Edmunds.com, said, “Chrysler’s been able to keep it going by diving into the sub-prime market more aggressively than other automakers and by jumping into the leasing game after it barely stepped onto the playing field while it worked its way out of bankruptcy. More recently, Chrysler has found a real winner with the Jeep Cherokee, which has become one of its biggest sellers in the white hot small SUV segment.”
That’s all for today,
Warren Gates, Senior Analyst, Normandy Research