Nasdaq and S&P manage to eke out small gains
US stocks ended in a mixed mode on Thursday, 16 October 2014 at Wall Street. An attempted rebound by the U.S. stock market fizzled out by the end of the session, as the main benchmarks wrapped up another rocky trading day essentially flat. Equity indices tumbled out of the gate for the second day in a row amid broad-based selling pressure that also weighed on equities.
The Dow Jones Industrial Average slipped 24.5 points, or 0.2%, to 16,116.24, closing low for the sixth straight session. The Nasdaq Composite ticked up 2 points to 4,217.39. The S&P 500 closed flat at 1,862.76, with energy sector leading the gains.
The start of Thursday's trading looked like the market was in store for another bludgeoning with the main benchmark falling 1% at the open. While broader markets struggled to hold onto gains, small and mid-cap companies rallied.
Economic data at Wall Street included Initial Claims, Industrial Production, Philadelphia Fed Survey, and the NAHB Housing Market Index. The weekly initial claims level fell to 264,000 from an unrevised 287,000, while the consensus expected an increase to 290,000. The Department of Labor said there were no special factors influencing the report.
Industrial production increased 1.0% in September after falling a downwardly revised 0.2% (from -0.1%) while the consensus expected an increase of 0.4%. Manufacturing production did a full 180 degree turnaround. After falling 0.5% in August, production rose 0.5% in September. That gain was in-line with the improvements in the Federal Reserve regional manufacturing surveys and the national ISM production index.
The Philadelphia Fed's Business Outlook Survey Dipped to 20.7 in October from 22.5, while the consensus expected a decline to 19.8. Production levels softened as the Shipments Index fell to 16.6 from 21.6 in September. Employment conditions worsened with the Number of Employees Index falling to 12.1 from 21.2. Separately, the NAHB Housing Market Index for October fell to 54 from 59, while the Briefing.com consensus expected the reading to hold at 59.
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There continued to be risk aversion in the world market place on Thursday. Also, the U.S. Treasury markets were lower after posting solid gains early on. That suggests some easing of trader and investor anxiety and can also be attributed to the price weakness in gold on Thursday.
However, European stocks plunged Thursday amid renewed worries about the periphery European Union nations that are once again showing financial strains. Bond yields in Spain, Italy and Greece are on the rise again. Indeed, fresh economic data from the EU Thursday showed the bloc's members that use the Euro currency saw its annual consumer inflation rate fall to a five-year low, at up just 0.3% in September.
Bullion metals ended the U.S. day session moderately lower on Thursday, 16 October 2014. However, the keen trader and investor anxiety in the world market place did limit selling interest in safe-haven gold. Gold futures snapped a three-session winning streak on Thursday as safe-haven demand eased on the back of a recovery in the U.S. stock market. Gold for December delivery fell $3.60, or 0.3%, to settle $1,241.20 an ounce. December silver lost 3 cents to $17.44 an ounce.
Crude-oil futures bounced from a two-year low on Thursday, 16 October 2014 scoring their highest one-day dollar gain in three weeks. Gains were checked by latest weekly inventory report which showed rise in crude supplies for last week.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November rose 92 cents, or 1.1%, to settle at $82.70 a barrel. It earlier touched below $80 a barrel for the first time since late June 2012.
In the latest weekly inventory report, EIA said that U.S. crude inventories rose 8.9 million barrels on the week ended 10 October 2014. Market had expected an increase of 2.5 million barrels. The bearish rise in crude inventories was due to reduced refinery demand. The EIA added that gasoline inventories declined 4 million barrels on the week, and stockpiles of distillates, which include heating oil, decreased 1.5 million barrels. The report was out a day later than usual due to Monday's Columbus Day holiday. Market had expected gasoline supplies to decline 1.6 million barrels and distillate stocks to fall 1.8 million barrels on the week.
Among stocks under focus, Goldman Sachs reported third-quarter earnings beating consensus estimate. But shares fell 2.6%.
On the downside, the technology sector ended in the red even as chipmakers rallied broadly. Large cap listings kept the sector in the red with Apple falling 1.3% after refreshing its product lineup during an afternoon press event. Similarly, Google lost 0.8% ahead of its quarterly report.
Treasuries ended on their lows after a steady slide from early morning highs. The 10-yr yield ticked up two basis points to 2.16%, which represented an 18-bps spike from the low.
Strong participation continued with more than a billion shares changing hands at the NYSE floor.
Tomorrow, September Housing Starts (consensus 1013K) and Building Permits (consensus 1030K) will be released at 8:30 ET while the preliminary reading of the Michigan Sentiment survey for October (expected 84.0) will cross the wires at 9:55 ET.
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