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Pre-Market Primer: Chinese Data Sends Stocks Down


A five-day rally is set to break, and Yahoo's new CEO guns for long term growth over making her shareholders happy.

MINYANVILLE ORIGINAL Stock index futures fell today after Chinese trade data disappointed.

China's export growth plummeted in July, increasing only 1% from the year earlier period. This comes after a 11.3% rise in June. Imports only rose 4.7%, compared with June's 6.3% gains. New loans in renminbi also disappointed, falling to 540.1 billion from 919.8 billion renminbi in June.

China reported more disappointing indicators yesterday, including one report that showed that inflation was much less pronounced than usual. This is raising speculation that the central bank would take further stimulative action to keep the economy moving forward. This data might be saying more about Europe than China, however. The biggest driver of slower export growth was the 16.2% decline in shipments to the European Union.

In the US, import prices fell 0.6% after a revised 2.7% drop in June, driven by lower oil prices. The price of American exports rose 0.5% last month after falling 1.7% in June.

Before market hours, futures pointed toward a lower opening after five straight days of gains on the major indices. Dow (^DJI) futures fell 0.37% to 13,089.00, S&P 500 (SPY) futures dropped 0.44% to 1,394.50 and Nasdaq (^IXIC) futures declined by 0.29% to 2,709.75. WTI crude futures also fell by 1.53% to $91.93/barrel on the economic data.

Yahoo (YHOO) shares fell 4.62% after the new CEO, Marissa Mayer, said in a regulatory filing that the company probably will not return the expected $4 billion from selling Yahoo's stake in Alibaba. The filing says that the new CEO will review the company's growth and acquisition strategies "to enhance long term shareholder value."

JC Penney (JCP) just reported a major disappointment. Adjusted earnings for the second quarter came in as a $0.37 per share loss and it will miss its targets for full year. Same-store sales fell 22%, online sales fell 33%, and gross margins fell to 33% from 38%. Over the quarter, the company decided to abort CEO Ron Johnson's plan to simplify prices, rather than rely on sales to attract customers.

Twitter: @vincent_trivett
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