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US stocks move lower on earnings; Target falls

By BY KEN SWEET

AP Business Writer NEW YORK (AP) - U.S. financial markets were lower in midday trading Tuesday following disappointing results from Target and economic data suggesting that the Chinese economy is continuing to slow down.

KEEPING SCORE: The Dow Jones industrial average fell 61 points, or 0.4 percent, to 16,507 as of 12:05 p.m. Eastern. The Standard & Poor's 500 index fell eight points, or 0.4 percent, to 1,931 and the Nasdaq composite fell 12 points, or 0.3 percent, to 4,370. All three indexes are on pace to erase their gains from the day before.

NO CACHET FOR TARGET: Target dropped $1.91, or 3 percent, to $59.11 after the company lowered its second-quarter earnings forecast. Target said the massive data breach the company experienced last year was costing far more than previously expected. Shoppers remain cautious about shopping at the store, Target said.

SLOW GROWTH: A Chinese purchasing managers' index compiled by HSBC showed that the country's services industry grew at the slowest rate last month since November 2005. China's economy has been going through a slow period for several months, despite a massive government effort to keep the economy expanding.

NO RECOVERY: Stocks have been unable to recover their losses from last week, when the S&P 500 fell 2.7 percent, its worst week since June 2012. While the S&P 500 rose modestly Monday, traders said the bounce might have traders trying to cover short-term positions.

Last week's sell-off was caused by a variety of factors, including the near-failure of a Portuguese bank, Argentina defaulting on its bonds and the ongoing tension between the U.S., Europe and Russia over Ukraine. Strategists say investors are in a wait-and-see mode.

"Once these geopolitical issues calm down, we should move higher from here," said Randy Frederick, a managing director at Charles Schwab.

DATA DU JOUR: Investors had two positive pieces of U.S. economic data to interpret. The Institute for Supply Management said the U.S. services sector expanded in July more than expected. The ISM survey came in at 58.7 versus the 56.5 economists had predicted. June factory orders also rose more than expected, rising 1.1 percent compared to the 0.6 percent increase economists were looking for.

CURRENCIES, COMMODITIES, AND BONDS: The dollar rose to 102.67 yen and the euro dipped to $1.3389. Crude oil fell $1.01 to $97.26 a barrel. Gold fell $4 to $1,284.90 an ounce and silver fell 37 cents to $19.86 an ounce. The yield on the 10-year Treasury note rose to 2.51 percent.

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