Mid-Morning Market Update: Markets Open Lower; Macy's Posts Rise In Profit

Related BZSUM #PreMarket Primer: Wednesday, May 14: Markets Surprised To Hear Bundesbank Is On Board With ECB Stimulus Market Wrap For May 13: Markets Close Again At Record Highs

Following the market opening Wednesday, the Dow traded down 0.36 percent to 16,655.95 while the NASDAQ declined 0.21 percent to 4,121.47. The S&P also fell, dropping 0.27 percent to 1,892.38.

Leading and Lagging Sectors
Basic Materials shares gained around 0.24 percent in trading on Wednesday. Meanwhile, top gainers in the sector included Harmony Gold Mining Company (NYSE: HMY), up 4.1 percent, and Thompson Creek Metals Company (NYSE: TC), up 3.8 percent. In trading on Wednesday, cyclical consumer goods & services shares were relative laggards, down on the day by about 0.36 percent.

Top decliners in the sector included Fossil Group (NASDAQ: FOSL), down 8.2 percent, and Kandi Technolgies Group (NASDAQ: KNDI), off 4.4 percent.

Top Headline
Macy's (NYSE: M) reported a rise in its first-quarter earnings. Macy's reaffirmed its outlook for the full year. It also increased its share-buyback plan by $1.5 billion and lifted its dividend by 25% to 31.25 cents per share. Macy's posted a quarterly profit of $224 million, or $0.60 per share, versus a year-ago profit of $217 million, or $0.55 per share. Its revenue slipped 1.7% to $6.28 billion. However, analysts were expecting earnings of $0.59 per share on revenue of $6.46 billion. Its revenue at stores open at least a year dropped 0.8%.

Equities Trading UP
SunOpta (NASDAQ: STKL) shares shot up 12.89 percent to $12.70 after the company reported upbeat Q1 earnings.

Shares of Isis Pharmaceuticals (NASDAQ: ISIS) got a boost, shooting up 10.16 percent to $27.64 after the company reported positive Phase 2 data on ISIS-GCGR Rx in HbA1c in patients with type 2 diabetes.

The Rubicon Project (NYSE: RUBI) shares were also up, gaining 27.09 percent to $14.45 after the company reported upbeat Q1 results and issued a strong outlook.

Equities Trading DOWN
Shares of Fossil Group (NASDAQ: FOSL) were 8.04 percent to $102.49 after the company issued a downbeat guidance. The company projected Q2 earnings of $0.90 to $0.97 per share, versus analysts' estimates of $1.16 per share.

USA Compression Partners LP (NYSE: USAC) shares tumbled 6.80 percent to $24.95 after the company priced 6.6 million units at $25.59 per unit.

Take-Two Interactive Software (NASDAQ: TTWO) was down, falling 3.32 percent to $19.95 after the company issued a weak outlook. For the first quarter, the company expected an adjusted loss of $0.35 to $0.25 per share on revenue of $120 million to $125 million. However, analysts expected a loss of $0.12 per share on revenue of $209.6 million.

Commodities
In commodity news, oil traded up 0.35 percent to $102.06, while gold traded up 0.95 percent to $1,307.10.

Silver traded up 1.86 percent Wednesday to $19.91, while copper rose 0.94 percent to $3.17.

Eurozone
European shares were lower today.

The eurozone's STOXX 600 declined 0.25 percent, the Spanish Ibex Index fell 0.05 percent, while Italy's FTSE MIB Index dropped 0.65 percent.

Meanwhile, the German DAX slipped 0.10 percent and the French CAC 40 tumbled 0.21 percent while UK shares fell 0.18 percent.

Economics
The MBA reported that its index of mortgage application activity rose 3.60% in the week ended May 9.

U.S. wholesale prices increased 0.6% in April, versus a revised 0.5% rise in March. However, economists were expecting a 0.2% gain in the PPI.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Charge Up on the MasterCard and Visa Stock Pullback

Last week, traders weren't very kind to the equity markets. They were particularly hard on financial stocks, as the Financial Select Sector SPDR (XLF) was down more than 4% in the week ended 4/11. Things were even worse for many individual financial-related stocks, including credit card payment processors MasterCard (MA) and Visa (V).

Mastercard stock sank nearly 4.9% for the week ended 4/11, while Visa stock was down 5.3%. Both stocks enjoyed a nice rebound in Monday trade, with MA stock jumping 3.7% and V spiking 2.2%. The move higher Monday was due to several positives for the leading payment companies, positives that I suspect will charge up both stocks in the weeks and months to come.

First off, part of today's gains in Mastercard and Visa stock were due to the wider buying in stocks after last week's aforementioned drubbing. If and when that buying cools, so too will the buying in MA and V. However, the gains in the two stocks weren't just driven by tag-along buying.

On Monday morning, Wall Street woke up to a research note from analyst David Konig of Robert W. Baird that upgraded MA stock to "Outperform" from "Neutral." Konig cited credit card metrics from JP Morgan (JPM) and Wells Fargo (WFC) showing credit card use volumes were about where they were in Q4. That helped quell fears that Q1 volumes will come in weaker than expected.

Click to EnlargeKonig also said Mastercard stock wouldn't likely be tainted much from ongoing litigation with some merchants, or from the economic weakness caused by Russia's recent aggression in Ukraine. Konig has an $83 price target on Mastercard stock.

Visa stock also got some favorable analyst coverage on Monday from Pacific Crest, which initiated coverage on the shares. The firm rates Visa stock with an "Outperform," saying that the company is poised to benefit from the growth of mobile payments and digital payment systems in hitherto under served markets. Pacific Crest's price target on Visa stock is $241.

The upbeat research calls on both Mastercard and Visa stock were particularly welcome, considering both shares have been pummeled lately. For example, in the month leading up to the April 11 close, Mastercard stock fell 10% while Visa stock plummeted 10.9%. This intense selling pushed both stocks below their respective short-term, 50-day moving average and their long-term, 200-day moving average.

The breakdown below the 200-day was particularly noteworthy for both stocks, because the slide below this all-important technical support level can either make or break a stock's next move.

Click to EnlargeWhat usually happens when a high-flyer quickly falls below the 200-day average is one of two things: Either the shares breakdown below the 200-day and come tumbling down in free fall, or the smart money starts to pile into the shares as a value play, taking advantage of good stocks at a bargain price.

I suspect the next phase for Mastercard stock and Visa stock are a case of the latter at work, and judging by Monday's trade, my suspicions are starting to be confirmed.

However, on Monday we received some rather upbeat retail sales data for March, a metric that could act as a tailwind for both Mastercard stock and Visa stock going forward. The Commerce Department reported a retail sales increase of 1.1% in the previous month, which was the biggest gain in the measure since September 2012.

More people spending more money is good news for credit card processors, and that might just be the added push both Mastercard stock and Visa stock need to break back firmly above technical resistance.

As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.

Emerging-markets fixed income: A constructive view for the discriminating eye

Following a challenging year, 2014 has started off with continued volatility. Some clients are asking their advisers about risks in emerging markets while others are wondering if the turmoil presents a buying opportunity.

Encouragingly, the strong economic fundamentals that have driven emerging markets debt over several years remain largely intact, technical dynamics are supportive, and valuations have improved. Developed economies are gaining traction, removing a headwind in place for several years.

Significant risks remain, however, and country differentiation and asset allocation will be a key theme this year. Recent volatility in the asset class stems from two broad types of risk: those specific to the countries themselves, and those presented by a less predictable U.S. interest rate environment. Also, uneasiness persists regarding China's economic rebalancing.

NOT ALL EMs ARE PAINTED WITH THE SAME BRUSH

Brazil and South Africa's diminished growth prospects, and anti-government protests in Turkey, Ukraine and Thailand are high-profile examples of sovereign risk that have damaged sentiment recently. These stories are balanced by countries such as Mexico, Colombia and the Philippines that are reaping the rewards of market-friendly reforms. Several Eastern European countries are benefiting from an ongoing recovery in the European Union, while Sub-Saharan Africa offers investors a fresh selection of rapidly-expanding economies.

The sudden increase in U.S. Treasury yields beginning in May 2013 left investors anxious about the transition away from years of exceedingly easy monetary policy. Though interest rates appear set to climb, the speed and magnitude will be muddled by conflicting signals about the U.S. and global economic recovery. Importantly, subdued inflation is allowing major central banks to commit to a low rate environment through 2014.

The ramifications of reduced global liquidity have been borne by emerging market currencies; several have depreciated 5-20% versus the U.S. dollar over the past year. In the process, markets have tested local-currency bonds in countries like Brazil, Indonesia, and Turkey as investors and central banks struggle to calibrate interest rate differentials between developed and developing countries. Encouragingly, floating exchange rate regimes in emerging markets are playing their designed role of acting as economic shock absorbers and preventing more damaging dislocations.

Diversified opportunities in emerging markets fixed income ensure that not all assets have or will perform similarly. Within local markets, Hungary, Romania and Nigeria delivered positive returns on an un-hedged basis last year. In U.S. dollar bonds, many high yield sovereigns posted gains, moderating the losses in interest rate sensitive investment-grade securities. Emerging market corporates have been more resilient on whole, given their short! er duration profile.

AN ATTRACTIVE ENTRY POINT

The yield back-up across assets is providing an improved entry point for investors. The spread on U.S. dollar sovereigns, close to 350 basis points over U.S. Treasuries, is above the 10-year average. Emerging market corporate bonds offer significant spread premiums over similarly-rated U.S. corporates, and emerging markets' domestic interest rate differentials are at five-year highs versus U.S. Treasuries.

Valuations are enhanced given that economic fundamentals in emerging markets have improved and remain largely superior to developed countries. Though expanding slower than recent years, emerging economies maintain their growth edge, and they run more balanced budgets. Public indebte

Average rate on 30-year loan falls to 4.23%

WASHINGTON — Average U.S. rates for fixed mortgages fell this week as the latest data continued to indicate a pause in the housing market's recovery.

Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan declined to 4.23% from 4.32% last week. The average for the 15-year loan dipped to 3.33% from 3.40%.

Mortgage rates have risen about a full%age point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. Saying the economy was gaining strength, the Fed pushed ahead last week with a plan to reduce the bond purchases, which have kept long-term interest rates low.

Data released Tuesday by real estate specialist CoreLogic showed that U.S. home prices slipped from November to December, and the year-over-year increase slowed, likely a result of weaker sales at the end of last year.

The December decline was the third straight month-to-month drop. Home prices had risen for eight straight months through September. For all of 2013, prices rose a healthy 11%.

The Commerce Department reported Monday that U.S. construction spending rose modestly in December, slowing from healthy gains a month earlier.

Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast that both will likely rise around 5%, down from double-digit gains in 2013.

Steady job gains are putting more people to work and enabling them to buy a home. And rising prices should encourage more owners to sell their homes. A larger supply of available homes would likely boost sales.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The! fee for a 15-year loan rose to 0.7 point from 0.6 point.

The average rate on a one-year adjustable-rate mortgage fell to 2.51% from 2.55%. The fee increased to 0.5 point from 0.4 point.

The average rate on a five-year adjustable mortgage slipped to 3.08% from 3.12%. The fee held at 0.5 point.

LinkedIn Stock Makes a Great Connection for Investors LNKD

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Welcome to the Stock of the Day!

Today is a big day for social media, now that word is out that online video advertising is expected to double to $8.1 billion by 2016. But while competitor Twitter (TWTR) took flight on the news, LinkedIn (LNKD) stock remains in the red.

What is weighing on LNKD shareholders? Is this a buying opportunity? Find out today.

Company Profile

LinkedIn is a social networking website that contends with the likes of Facebook (FB) and Twitter by catering to professionals looking to advance their careers. But while LinkedIn competes with Facebook and Twitter for user attention, its business is quite different—as career and job markets become increasingly Internet-based, LinkedIn’s services will become even more useful.

For example, many companies are offering applicants the opportunity to simply upload their LinkedIn data to a hiring application to save time. With over 225 million users in more than 200 countries, LinkedIn brought in $972 million in FY 2012.

Analyst Buzz

What sent LNKD shares lower was that a Citigroup (C) analyst cautioned that the number of job postings on LinkedIn grew more slowly in the fourth quarter than in the third quarter. The analyst, Mark May, believes that LinkedIn will at best match the consensus sales estimate for hiring solutions revenue. Investors reacted to these remarks but it’s clear that much of the analyst community disagrees with May.

Currently, the consensus estimate is that LinkedIn will earn 32 cents per share on $384.17 million in total sales for the fourth quarter. This represents 45.5% annual earnings growth and 52.4% sales growth. So all eyes will be on the social media giant when it reports earnings later this month.

Looking Ahead

In any event, I’m considering LNKD a great long-term position. Looking ahead to FY 2014, analysts forecast 41.6% annual earnings growth and 41.2% sales growth. In just the past week, the analyst community has revised both this year’s and next year’s consensus EPS estimates up 5% and 4% respectively. And this is head and shoulders above the competition.

The rest of the Internet Information Providers industry is headed towards an average of 25.9% earnings growth for FY 2014. Then again, a recent Pew Research Center study said as much, as 22% of its participants replied that they use LinkedIn, vs. 21% for Pinterest and 18% for Twitter.

Current Ratings

Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. For the past 12 months LNKD has stayed in buy territory. That’s because this company has solid fundamentals. LinkedIn has figured out how to maximize sales growth, operating margin growth, as well as how to top analyst estimates consistently.

Of the eight fundamental metrics I graded this stock on, LNKD receives A- or B-ratings on four. The exceptions are cash flow (C-rated) and return on equity (D-rated), and earnings growth, but I imagine these will firm up in the company’s next earnings announcement. So LNKD receives a C for its Fundamental Grade.

Meanwhile, institutional buying pressure (as indicated by its B-rated Quantitative Grade) remains strong.

Bottom Line: As of this posting I consider LNKD a B-rated Buy.

Would you like to check the fundamentals backing up one of your stocks? For more stock grades, please visit my Portfolio Grader website!

U.S. postpones 2014 hike in mortgage fees

New housing finance chief Mel Watt says he will postpone fee increases set for April.

NEW YORK (CNNMoney) It's a Christmas miracle! Planned fee increases that would have added to the cost of millions of mortgages will be postponed.

Currently, borrowers seeking loans backed by Fannie Mae and Freddie Mac are set to pay higher upfront fees starting April 1.

The fees, ordered by the Federal Housing Finance Agency earlier this month, are meant to help safeguard banks against risky borrowers who might default.

But housing experts say they will add thousands of dollars to the cost of all mortgages insured by Fannie and Freddie, with the biggest hits taken by borrowers with less than perfect credit histories.

On Friday, the incoming chief of the FHFA, Mel Watt, said he intends to postpone the fees -- and perhaps even cancel them -- until more analysis is done. The FHFA oversees Fannie Mae and Freddie Mac.

Watt, a former Democratic member of Congress, has been confirmed to his post by the Senate and takes office on January 6.

In a statement, Watt said he intends to "evaluate fully the rationale" for the fees and their impact on Fannie and Freddie and the "availability of credit."

The mortgage industry has been bracing for substantial increases in the price of loans in 2014.

"If these [policies] had been implemented, it would have increased borrowing costs dramatically," said David Stevens, CEO of the Mortgage Bankers Association.

The hit for individual borrowers would depend on the amount of the home purchase being financed, according to Brian Koss, executive vice president at Massachusetts-based lender Mortgage Network.

Borrowers would have paid a fee when they took! out the loan, or they could have effectively rolled the higher fees into their interest rate, raising monthly mortgage payments by as much as a quarter percentage point.

Even with the reversal, however, mortgages will probably get more expensive over the next few months anyway as the Federal Reserve cuts back on its purchases of mortgage backed securities, a program designed to keep interest rates low.

Stevens, the mortgage industry representative, said the proposed increases made little sense. Defaults on mortgages made in recent years have been much lower than on those made before the housing crash.

As a result, Fannie and Freddie are flush with profits, so much so that they have already returned almost all of their $187 billion taxpayer-funded bailout.

"The GSEs are making a lot of money," said Stevens. "There's no rationale for the increases."

Why Support.com Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Support.com (NASDAQ: SPRT  ) plunged 26% during intraday trading Thursday after the company beat expectations with its third-quarter results, but outlined disappointing support program changes which will negatively affect its business at Comcast in 2014.

So what: Quarterly adjusted revenue rose 30% year over year to $23.7 million, which translated to non-GAAP income from continuing operations of $4.6 million, or $0.08 per share.  By contrast, analysts were expecting adjusted earnings of just $0.03 per share on $21.51 million in sales.

What's more, Support.com also stated fourth-quarter non-GAAP revenue should be in the range of $24 to $26 million, with non-GAAP earnings in the range of $0.06 to $0.08 per share. The midpoint of both ranges came out well ahead of analysts estimates, which were modeling adjusted earnings of $0.03 per share on sales of $23.24 million.

However, CEO Joshua Pickus also elaborated on the company's subsequent earnings conference call that today's beat largely occurred thanks to a later-than-anticipated transition by Comcast away from its current signature support program. As it stands, Pickus stated, though they expected revenue from the program to decrease this quarter, the "subscriber cutover is largely occurring toward the end of the year."

Now what: Going forward, Comcast's signature support program should be discontinued by the end of this year in favor of a bundled network support package, which will be fully implemented in 2014. As a result, though Pinkus says Support.com's Comcast revenue next year should be "at least equal and likely exceed Comcast revenue in 2013," it will come at the price of "considerably lower margins."

In the end, while Support.com should have little trouble continuing to grow its top line, I can't blame investors for bidding the stock price down today given its impending reduced profitability going forward.

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Go Global With This Generic Drugmaker

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Believe it or not, there is a silver lining to the dysfunctional politics occurring in our nation's capital right now.

While our elected leaders embarrass the U.S. on the world stage, the U.S. dollar has been on a slippery slope. And that's great news for two parties: multinational companies, and those who invest in multinational companies.

For the first half of 2013, the U.S. dollar steadily gained ground against many of the world's major currencies. This weighed on the margins of multinational companies that paid their bills in U.S. dollars but received sales in global currencies.

But now the tables have turned.

Global confidence in the U.S. dollar is once again eroding because of the fiscal irresponsibility of our elected leaders and the fact that the Federal Reserve is about to pass into the hands of another dove — current vice chair Janet Yellen.

The weaker U.S. dollar should boost the corporate profits of these companies, making them appear very attractive looking ahead to the fourth quarter and beyond. So if you're looking for more conservative ways to invest abroad, I'd start with companies that have their operations around the world and get paid in a variety of currencies.

One such company is Actavis (ACT), one of the world's largest generic drugmakers. With a portfolio of more than 750 pharmaceutical products, Actavis has its name on everything from antibiotics to contraceptives to smoking-cessation treatments. ACT operates in more than 60 countries and out-licenses generic products in more than 100 countries, so it is a direct beneficiary of the falling dollar.

What really caught my eye about Actavis is its work on biosimilars — generic versions of biologic drugs. Biologic drugs are at the cutting edge of modern medicine, so many treatments run at tens of thousands of dollars. Generic biosimilars are potentially cheaper, and to date they're not available in the U.S. Thus, right now there is a race between biotechs to develop and get their biosimilars approved. Considering that the global market for biosimilars is forecast to be between $10 billion to $20 billion by 2020, this is a lucrative opportunity.

Actavis is based in the U.K. — specifically in Dublin, Ireland. For the better part of the past three decades, Actavis (formerly known as Watson Pharmaceuticals) was headquartered in the United States. But just a few months ago, the company acquired Warner Chilcott and took advantage of the $8.5 billion deal to make the leap across the pond.

With Warner Chilcott now under the Actavis umbrella, the company has increased expertise in gastroenterology and dermatology. And now that the company is based in the U.K., Actavis will pay lower taxes. In fact, management estimates that the deal will add a sizable 30% to earnings per share in 2014.

The new Actavis Plc is a company that dominates the global market for generic drugs — taking in $11 billion in annual sales — and enjoys tremendous tax savings by being based in Ireland.

Actavis is a prime example of the kind of multinational company you should have your eye on.

Louis Navellier is the editor of Blue Chip Growth. As of this writing, ACT was on the Blue Chip Growth buy list.

Advisers can report elder financial abuse without violating client privacy

Investment advisers and brokers who suspect that elderly clients are the victims of financial abuse can report it to appropriate government agencies without worrying about violating their privacy, according to guidance issued by federal financial agencies Tuesday.

Under the Gramm-Leach-Bliley Act, a financial firm cannot disclose a client's information to a third party without telling the client and giving him or her a chance to decline to release the information.

In a conference call with reporters, federal regulators clarified that notifying local, state or federal officials about suspicions of elderly clients being ripped off is protected under the law.

“Reporting suspected elder financial abuse to the appropriate authorities is typically the right thing to do and generally will not violate the Gramm-Leach Bliley Act,” said Richard Cordray, director of the Consumer Financial Protection Bureau.

The elderly are attractive targets because they often have accumulated assets and sometimes suffer from diminished mental capacity, Mr. Cordray said.

Employees of financial institutions “may be able to spot irregular transactions, abnormal account activity, or unusual behavior that signals financial abuse sooner than anyone else can,” he said. “When seniors fall victim to theft by a trusted family member or a scam, they may be too embarrassed or too frail to pursue legal action — so it is critical that other folks are looking out for them, too.”

Wells Fargo Downgrades Travelers Co. to “Market Perform” (TRV)

Travelers Companies Inc (TRV) was downgraded by analysts at Wells Fargo on Thursday, as they believe shares of the insurance provider will lose some steam going forward.

The analysts downgraded TRV from “Outperform” to “Market Perform” and see shares reaching a valuation range of $89-$92, down from the previous target range of $94-$98. This new price target range suggests a 6% to 10% upside to the stock’s Wednesday closing price of $83.73.

Furthermore, the analysts note that TRV is up 41% since they started recommending the stock in January 2012, versus a 32% gain for the S&P 500. “Travelers has been a leader in gaining commercial lines renewal rate increases utilizing a disciplined, segmented approach. Yet as TRV reaches rate adequacy across more of its segmentation bands, we think there is less profit leverage, which could slow multiple expansion going forward.”

Travelers shares were inactive during pre-market trading on Thursday. The stock is up 16.58% year-to-date.

Falling Energy Prices Keep Wholesale Prices in Check

Wlifredo Lee/AP WASHINGTON -- Falling energy prices kept a lid on wholesale inflation in July after a jump in gasoline had boosted prices in June. The Labor Department reported Wednesday that wholesale prices showed no change last month compared with June, when they had risen 0.8 percent. That was the most in nine months. Energy costs fell 0.2 percent, after June's 2.9 percent surge. Gasoline prices dropped 0.8 percent and natural gas costs slid 3.9 percent. Excluding volatile food and energy costs, so-called core prices rose just 0.2 percent. Core wholesale prices are up 1.2 percent over the past 12 months, the smallest one-year increase since November 2010. Tame inflation has helped consumers increase spending this year despite slow income growth and higher Social Security taxes. Aside from sharp swings in gas prices, consumer and wholesale inflation has barely increased in the past year. Overall wholesale prices rose 2.1 percent in July compared with the previous July. For July, drug prices rose 1 percent, the largest gain since a 2.5 percent rise in January. Drug companies have been introducing price increases in January and July of each year. Food costs were flat in July as a jump in pork prices was offset by a decline in the cost of fresh vegetables. On Thursday, the government will report on consumer prices for July, and economists estimate that overall and core prices rose just 0.2 percent. For the 12 months ending in June, overall consumer prices rose 1.8 percent and core prices 1.6 percent. Those levels are below the Fed's 2 percent target for inflation. At its last meeting in July, the Fed added language to its policy statement to express concern that inflation persistently below 2 percent could pose risks to the economy. The Fed announced after the meeting that it planned to keep buying $85 billion a month in bonds to keep downward pressure on long-term interest rates. It also said it planned to keep its key short-term rate near zero, where it's remained since December 2008 -- at least as long as unemployment is above 6.5 percent. Chairman Ben Bernanke and other Fed officials have said the central bank could start slowing its bond purchases later this year. Some economists think that could begin after the Fed's next meeting in September. Most expect the slowdown to be gradual. New bond purchases might not end until mid-2014 -- and only then if the unemployment rate has dropped to around 7 percent. Unemployment fell in July to 7.4 percent from 7.6 percent in June. The July figure was a 4½-year low, but it was still well above the 5 percent to 6 percent range that economists associate with a healthy economy. The combination of modest economic growth and still-high unemployment has kept wages from rising quickly. That's made it harder for businesses to raise prices.