Midday Report: Lululemon Suffers From Weak Traffic; U.S. Stocks Gain

U.S. stocks held higher Friday as investors weighed a weaker jobs report against the chances of a September rate hike. Markets have priced in a roughly one in five chance the Federal Reserve will make a move this month. Factory orders saw their largest growth in nine months in July, reversing a nearly two percent decline in the month earlier. The reversal is a positive sign of a recovery, albeit a slow one, in the manufacturing sector. Lululemon (LULU) - Get Report tumbled after reporting in-line quarterly earnings and issuing a soft outlook. The yoga apparel chain's CFO said weak foot traffic was a headwind over its second quarter and should continue to be in the third. Ciena (CIEN) - Get Report was downgraded to EQUAL WEIGHT at Morgan Stanley and to HOLD from BUY at Drexel Hamilton. Both firms said the move was a valuation call. Ciena reported a mixed quarter a day earlier. TheStreet's Keris Lahiff reports from Wall Street.