World Bank cuts global growth outlook
U.S. stock market fell on Wednesday, 11 June 2014 with the Dow Jones Industrial Average snapping a five-day winning streak and retreating from the record level reached on Tuesday. Equity indices spent the duration of the session in the red, while the Nasdaq made a momentary appearance in the green. The tech-heavy index outperformed thanks to relative strength among chipmakers.
The Dow Jones Industrial Average was set back after falling 102.04 points, or 0.6% to 16,883.88. The Nasdaq Composite ended the day down 6.07 points, or 0.1% at 4,331.93. The S&P 500 closed 6.90 points, or 0.4%, lower at 1,943.89.
Eight of ten economic sectors ended in the red led by finnacials, industrials and materials sectors. Energy and healthcare sectors were the only ones to end in tbe green.
Specifically, the World Bank cut its 2014 global growth outlook to 2.8% from 3.2% citing the harsh winter in the U.S. and the conflict in Ukraine while also revising projections for several major economies. For instance, the growth forecast for the U.S. was lowered to 2.1% from 2.8%, while China's GDP expectations were taken down to 7.6% from 7.7%.
A feature in the market place recently has been the sinking value of the Euro currency and the rising value of the U.S. dollar. Last week's new monetary stimulus measures from the European Central Bank were a bearish underlying development for the Euro currency, as it hovers near a four-month low. Meantime, the U.S. dollar index is trading near a four-month high.
Economic data was limited to two reports. The weekly MBA Mortgage Index surged 10.3% to follow last week's 3.1% decline and the Treasury Budget for May showed a deficit of $130.00 billion, which followed the prior deficit of $138.70 billion.
Among stocks under focus, Boeing fell 2.3% after being downgraded to 'Sector Perform' at RBC Capital Markets. Bank of America underperformed its peers with a 2.1% decline in reaction to reports the bank's settlement negotiations with the Justice Department have hit a snag.
Bullion prices ended near unchanged mark on Wednesday, 11 June 2014. Gold prices ended the U.S. day session slightly higher on Wednesday and hit a two-week high as optimism over global growth prospects took a hit and equities gave back some gains from their record run.
Gold for August delivery rose $1.10, or 0.1%, to settle at $1,261.20 an ounce on the Comex division of the New York Mercantile Exchange. July silver settled little changed at $19.17 an ounce.
Crue oil futures settled with a slight gain on Wednesday, 11 June 2014 as a cut to a global growth forecast offset support from a bigger-than-expected decline in weekly U.S. crude supplies. Crude oil for July delivery rose 5 cents to settle at $104.40 a barrel on the New York Mercantile Exchange.
In the latest he U.S. Energy Information Administration said crude stockpiles fell 2.6 million barrels for the week ended 6 June 2014. Market had forecast a smaller decline of 1.2 million barrels. But gasoline supplies rose by 1.7 million barrels, while distillate stockpiles climbed by 900,000 barrels. Gasoline stockpiles were expected to fall by 500,000 barrels, while distillates, which include heating oil, were seen up 750,000 barrels.
Indian ADRs ended mostly higher on Wednesday. In the IT space, Infosys surged 4.7% at $54.76 and Wipro added 1.41% at $11.54 per ADR. In the banking space, ICICI Bank was down 0.06% at $51.92 and HDFC Bank rose 0.42% at $47.47. In the other sectors, Tata Motors slipped 0.93% at $39.28 and Dr Reddy's Laboratories gained 1.39% at $40.92.
Participation remained well below average and today's 520 million shares represented the lowest NYSE floor volume of the year.
Tomorrow, weekly initial claims (consensus 315K), May Retail Sales (consensus 0.7%), and May Import/Export Prices will be released at 8:30 ET, while the Business Inventories report for April (expected 0.4%) will cross the wires at 10:00 ET.
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