Stocks Finish Lower On Rate Hike Chatter -- U.S. Commentary

(RTTNews) - U.S. stocks edged lower Tuesday, after a top Federal Reserve official said an interest rate hike is likely in September.

It would take a big downturn in the economy for the Fed not to tighten at its next meeting, Atlanta Fed President Dennis Lockhart told the Wall Street Journal.

"I think there is a high bar right now to not acting, speaking for myself," Lockhart said in an interview with the newspaper published on Tuesday. "It will take a significant deterioration in the economic picture for me to be disinclined to move ahead."

As one of the Fed's more dovish members, if Lockhart is on board with a rate hike markets will price in such a move.

Today's economic news suggests that manufacturers are coping with the strong U.S. dollar. Government data showed that orders for the U.S. manufacturing sector rose a little more than expected in June.

The U.S. Commerce Department revealed that factory orders rose 1.8 percent, compared with a decline of 1.1 percent in the previous month. Economists were predicting an increase of 1.7 percent.

The Dow Jones Industrial Average declined 47.51 points, or 0.3%, to 17,550.69, after being down nearly 93 points. The S&P 500 Index finished down 4.72 points, or 0.2%, at 2,093.32. The Nasdaq Composite Index slid 9.84 points, or 0.2%, to 5,105.55.

The Dow was down its fourth straight session.

In corporate news, Apple (AAPL) shares continued to fall in correction territory. Shares are down 11 percent from February's record high.

Office Depot, Inc. (ODP) reported a loss for the second quarter that narrowed from last year. The stocks dropped 1.8 percent.

Coach (COH) added 3 percent on better-than-expected earnings.

Archer Daniels Midland Co. (ADM) said its second-quarter profit declined from the prior year, amid lower revenues. The company noted that domestic and export demand for ethanol was robust, but record industry production limited margins.

CVS (CVS) reported strong revenue but issued somewhat downbeat guidance. Shares slipped 2.4 percent.

Meanwhile, British pharmaceutical company Shire plc (SHPG, SHP.L) confirmed that it has made a proposal to acquire Baxalta Inc. (BXLT). If the deal is completed in its current form, the all-stock transaction is valued at about $30 billion.

The majority of the European markets ended Tuesday's session in the red, following 5 consecutive sessions of gains. Mixed corporate earnings reports and the continued struggles of the Greek stock market weighed on investor sentiment.

The Greek market dropped by over 16 percent yesterday, after reopening following a 5-week closure. The Greek market fell by another 1.22 percent today. For the second day in a row, shares of Greek bank stocks hit limit down.