Majority of economic data check in better than expected
US stocks ended in a mixed mode at Wall Street on Wednesday, 31 July 2013. Stocks held slim gains into the afternoon when the latest policy directive from the Federal Open Market Committee sent the Nasdaq and S&P 500 to fresh highs. The two indices were unable to maintain those levels into the close as broad-based weakness pressured the major averages to their lows.
The Dow Jones Industrial Average fell 21.05 points, or 0.1%, to 15,499.54. The Dow rose 4% for July, its eighth monthly rise in nine. The S&P 500 index fell a fraction to 1,685.73, with consumer discretionary leading sector gains. The Nasdaq Composite advanced 9.90 points, or 0.3%, to 3,626.37, leaving it up 6.6% in July 2013.
In its latest monetary policy actions the FOMC said U.S. monetary policy will remain highly accommodative for as long as it takes the U.S. economy to get healthy againincluding continuing its $85 billion-a-month bond-buying program.
Among major stocks under focus, Symantec Corp. rallied 9.6% after the maker of Norton anti-virus software reported first-quarter profit and revenue that beat estimates. Garmin advanced 7.6%. The personal-navigation-device maker reported a 7.2% drop in second-quarter earnings as revenue dropped in its key automotive and mobile segment, but results topped Wall Street estimates. Comcast said second-quarter profit rose 29% as higher cable prices helped to offset a decline in video subscribers. The cable operator's shares gained 5.6%.
The raw commodity bulls got some encouragement coming out of China Wednesday. Chinese government officials said Wednesday they will maintain a steady economic growth pace despite highly complicated conditions at present. The statement came after a meeting of the Chinese politburo. Also on Wednesday, the Chinese central bank injected money into its financial system for the first time since February, in a signal of easier monetary policy.
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The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.3% on Wednesday.
Among economic data expected at Wall Street today, the first day of a bunch of highly anticipated and major economic data saw the U.S. gross domestic product reading for the second quarter. The number came in at up 1.7% when the consensus forecast for the GDP figure was up 0.9%.
Separately, the monthly ADP jobs report, also released Wednesday morning, showed slightly stronger-than-expected gains of 200,000 versus expectations of up 180,000.
Also, the Chicago PMI improved in July as the index increased from 51.6 in June to 52.3. Manufacturing in the Chicago region has now expanded for three consecutive months after contracting in April. The consensus expected the index to fall slightly to 51.5. Even after the gain, the PMI is still well below the May reading when the index reached 58.7. Also of note, the weekly MBA Mortgage Index fell 3.7% to follow last week's 1.2% decline. This marks the seventh negative reading in a row and the eleventh decline out of the past twelve weeks.
On Friday awaits the key U.S. jobs report. The key non-farm payrolls figure is forecast to rise by around 175,000 workers in July. The overall unemployment rate is expected to have declined by 0.1%, to 7.5%. European traders are awaiting the European Central Bank and Bank of England monthly meetings that occur on Thursday. Asian traders and investors are awaiting manufacturing data from China, due out Thursday.
Bullion metal prices ended lower on Wednesday, 31 July 2013 at Comex. Prices fell following stronger than expected economic data at Wall Street and a rising dollar. The market place is girding for more major economic data due out on Thursday and Friday. Trading in many markets, including the precious metals, will likely be more active the rest of this week.
Gold for December delivery ended lower by $11.8 (0.9%) at $1,313 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. Gold ended the month higher by 7.3%. September silver ended lower by $0.05 (0.3%) at $19.63 an ounce on Wednesday. Silver ended the month higher by 0.8%.
Crude-oil prices ended higher on Wednesday, 31 July 2013 at Nymex. Prices rose following better than expected batch of economic data at Wall Street. Traders also focused on the latest supply data from EIA. Light and sweet crude for September ended higher by $1.95 (1.9%) at $105.03 a barrel on the New York Mercantile Exchange on Wednesday. Prices gained 8.8% on a monthly basis.
The Energy Information Administration reported an increase of 400,000 barrels in crude stockpiles for the week ended 26 July 2013. Market looking for a 3 million-barrel decline. Crude inventories had tallied a drop of nearly 30 million barrels during the previous four weeks. The report also showed that gasoline supplies unexpectedly rose by 800,000 barrels, while distillate stockpiles, which include heating oil, surprising fell 500,000 barrels.
Advancers ran just ahead of decliners on the New York Stock Exchange, where 903 million shares traded. Composite volume cleared 3.8 billion.
Indian ADRs ended mixed on Wednesday. In the IT space, Infosys was down 0.04% and Wipro was up 1.9%. In the Banking space, HDFC Bank was down 1.3% and ICICI Bank was down 0.55%. In other space, Tata Motors was up 1.2%, and Sterlite was up 2.6%.
Tomorrow, July Challenger Job Cuts will be reported at 7:30 ET and weekly initial claims will cross the wires at 8:30 ET. At 10:00 ET June construction spending and the July ISM index will be released while auto and truck makers will be reporting their July sales throughout the day.
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