U.S. economy expanded at a 4% annual pace in the second quarter
U.S. stocks finished slightly higher but in a mixed mode on Wednesday, 30 July 2014 as the Federal Reserve appeared to soothe fears that it might start raising interest rates sooner than anticipated.
The Dow Jones Industrial Average finished off session lows, but with a loss of 31.75 points, or 0.2% to 16,880.36. The Nasdaq Composite added 20.20 points, or 0.5%, to 4,462.90. The S&P 500 closed up less than a point at 1,970.08.
Five sectors posted gains, while the other five finished in the red.
American Express lost 0.9% despite reporting better than expected earnings.
Consumer discretionary and financial sectors hovered near their flat lines into the afternoon, but surged to the top of the leaderboard shortly after the release of the FOMC statement.
Also Read
The U.S. economy expanded at a 4% annual pace in the second quarter, stronger than economists had forecast and a sign that the economy has recovered from the unusually harsh winter. 3.0% rise was expected versus a reading of minus 2.9% in the first quarter.
Wednesday afternoon's results of the two-day meeting of the Federal Reserve's Open Market Committee (FOMC) were as expected. The FOMC will continue to taper its monthly bond-buying program (quantitative easing) by slicing another $10 billion per month from the programnow totaling $25 billion a month. Traders and investors did not expect a lot of fresh, significant news to come out of the FOMC meeting, which was the case as market reacted little to the news.
The ADP national employment report for July was also out earlier on Wednesday. That report is a precursor to Friday's more important Labor Department employment report. The ADP figure was forecast to come in at up 238,000, but was a slight miss on the downside and reported at up 218,000. Friday's U.S. jobs report is forecast to see a rise in non-farm payrolls of 230,000 in July versus up 288,000 in June.
In overnight news, the European Union reported its business confidence index, called the Economic Sentiment Indicator, rose to 102.2 in July from 102.1 in June. The July figure beat market expectations for a reading of 101.9.
There are geopolitical issues impacting trading this week. The European Union and U.S. this week have slapped new and harsher sanctions on Russia. However, those sanctions did not surprise the market place and there was a muted reaction from markets on Wednesday.
Tech stocks took their cue from New York Stock Exchange-listed Twitter, which soared on stellar results.
BUllion prices once again mixed on Wednesday, 30 July 2014 at Comex. Gold prices continued to pull back on Wednesday as a stronger-than-expected report on the U.S. economy dampened demand for safety plays. Prices were pressured somewhat by a much-stronger-than-expected U.S. gross domestic product report and by a rising U.S. dollar index that hit a nearly six-month high.
Gold for August delivery fell for a second day, dropping $3.40, or 0.3%, to settle at $1,294.90 an ounce. September silver edged up a penny to $20.60 an ounce.
Crude Oil futures ended lower on Wednesday, 30 July 2014 at Nymex after a weekly U.S. government supply report showed a drop in crude stockpiles. But a stronger than expected US GDP report kept the loss under check. Crude oil futures for September delivery fell 70 cents, or 0.7%, to end at $100.27 a barrel on the New York Mercantile Exchange. Crude futures are down for the third consecutive session.
As per the EIA report, crude oil supplies fell 3.7 million barrels in the week ended 25 July 2014. That contrasted with expectations of a drop of 2.2 million barrels. The EIA also reported gasoline supplies rose by 400,000 barrels, while inventories of distillates, which include heating oil, rose 800,000 in the week. Market had expected gasoline supplies to add 1.1 million barrels, and supplies of distillates to increase 1.4 million barrels.
Tomorrow, the July Challenger Job Cuts will be announced at 7:30 ET, while weekly initial claims (consensus 310K) and the Q2 Employment Cost Index (consensus 0.4%) will be released at 8:30 ET. The day's data will be topped off with the 9:45 ET release of the Chicago PMI for July (expected 61.8).
Powered by Capital Market - Live News