Apple shares drop for second consecutive day on fears of Chinese slowdown
U.S. stocks closed modestly higher on Tuesday, 05 January 2015 snapping a three-day slump, as Wall Street fought off a fall in oil prices but continued to deal with the aftershocks of Monday's China-inspired rout. All three indexes opened slightly higher but turned negative in morning trade. Stocks extended losses in the early afternoon as oil prices plummeted 2.5% amid concerns about an expanding global supply glut. Stocks have recovered even though oil remained down.
The Dow Jones Industrial Average added 9.72 points, or less than 0.1%, at 17,158.66, recovering from a roughly 110-point drop in the early afternoon. The Nasdaq Composite ended the day slightly lower, down 11.66 points, or 0.2%, at 4,891.43. The S&P 500 closed 4.04 points, or 0.2%, higher at 2,016.70, after falling as much as 0.4% in the early afternoon.
Equities saw a global selloff on Monday, sparked by worries about an economic slowdown in China and sectarian tensions between Iran and Saudi Arabia, which helped drive volatility in crude oil.
Attempting to calm nerves, China injected some 130 billion yuan ($19.9 billion) into the country's financial system on Tuesday, a day after the Shanghai Composite Index plunged nearly 7% following a weaker-than-expected manufacturing report.
A surprise cash injection from China's central bank into the country's financial system helped stabilize Asian markets somewhat but failed to give global equities a sustained boost. Asian markets remained choppy, with the Shanghai Composite Index swinging in and out of losses before closing 0.3% lower.
Apple's shares fell 2.5% on Tuesday, down for a second session on continuing fears about slowing demand for the iPhone and weakness in China.
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The ICE U.S. Dollar Index, a gauge of the buck against a measure of six currencies, was up by 0.6% on Tuesday. A stronger greenback can diminish the appeal of dollar-denominated assets, making them more expensive to buyers using other currencies.
Bullion prices ended higher on Tuesday, 05 January 2015 at Comex. Gold futures settled at their highest level in about two weeks on Tuesday, as uncertainty about China's economy and tensions in the Middle East lingered a day after a global stock-market rout.
February gold picked up $3.20, or 0.3%, to settle at $1,078.40 an ounce. March silver rose 0.9% to end at $13.98/oz.
Crude-oil prices settled under $36 a barrel on Tuesday, 05 January 2016 marking their lowest settlement in about two weeks, as concerns about an expanding global glut and weak economic data from China weighed on sentiment. Tensions in the Middle East, another driver of oil's recent gyrations, have remained high.
February West Texas Intermediate crude fell by 79 cents, or 2.2%, to settle at $35.97 a barrel on the New York Mercantile Exchange. February Brent crude on London's ICE Futures exchange fell 80 cents, or 2.2%, to $36.42 a barrel.
Traders are also watching escalating violence in Libya, where two oil terminals were attacked. The oil market will take cues from weekly U.S. crude inventory and production data on Wednesday from the Energy Information Administration. Market estimates a decline of two million to three million barrels from crude stockpiles.
Treasuries traded near their highs during the retreat from the opening highs in the stock market, but the 10-yr note ended flat with its yield unchanged at 2.25%.
Today's participation was a bit below average as fewer than 850 million shares changed hands at the NYSE floor.
Investors did not receive any economic data of note today, but tomorrow the weekly MBA Mortgage Index will be released at 7:00 ET while the ADP Employment Change for December (consensus 190k) will cross the wires at 8:15 ET. The Trade Balance for November (consensus -$44.70 billion) will be released at 8:30 ET while Factory Orders for November (consensus -0.2%) and December ISM Services (consensus 56.4) will both be reported at 10:00 ET. The day's data will be topped off by the 14:00 ET release of the FOMC Minutes from the December policy meeting.
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