Indices reverse direction in final hour of trading
U.S. stocks reversed direction to close lower on Thursday, 29 November 2018 as investors' attention shifted to a weekend meeting between President Donald Trump and Chinese President Xi Jinping amid some skepticism whether the two leaders can reach a consensus on trade. Major indexes had earlier traded higher for a couple of hours following the release of the Federal Reserve minutes, which generally reaffirmed the central bank's hawkish bias with the proviso that the policy-setting committee will maintain flexibility.
The Dow Jones Industrial Average slid 27.59 points, or 0.1%, to 25,338.84, while the S&P 500 index dropped 5.96 points, or 0.2%, to 2,737.83. The Nasdaq Composite Index shed 18.51 points, or 0.3%, to 7,273.08.
The Fed minutes from the central bank's November meeting showed that almost every member of the Federal Open Market Committee felt comfortable with raising interest rates fairly soon as long as job market and inflation data were in line with expectations, bolstering expectations of another rate hike in December. However, they did note that monetary policy was not on a preset course, reiterating the need to be flexible about monetary policy in 2019.
Investors are hoping that Trump and Xi will be able to make progress toward a deal, or at least hit on a framework for further negotiations, that would halt new or expanded tariffs on Chinese imports that the president has consistently threatened over the course of 2018.
The ICE U.S. Dollar Index was up 0.1% at 96.889 as gold futures settled. A stronger dollar typically weakens investment demand for dollar-priced commodities
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Reviewing Thursday's economic data, which included PCE Price Index for October, Personal Income and Spending for October, Pending Home Sales for October, and weekly Initial and Continuing Claims. Personal income increased 0.5% in October while personal spending jumped 0.6%. Real PCE, which is the component that factors into Q4 GDP forecasts, was up a solid 0.4%. The PCE Price Index was up 0.2% and the core PCE Price Index, which exclude food and energy, was up 0.1%.
Pending Home Sales decreased 2.6% in October. Today's reading follows a revised 0.7% increase in September (from +0.5%).
Initial claims for the week ending November 24 increased by 10,000 to 234,000 while continuing claims for the week ending November 17 increased by 50,000 to 1.710 million.
Bullion prices ended higer at Comex on Thursday, 29 November 2018. Gold prices notched a modest gain on Thursday as a leading dollar index steadied and benchmark U.S. stock indexes saw a pullback a day after the Dow Jones Industrial Average scored its best performance in eight months.
Gold for February delivery which is the most-active contract, added 60 cents, or 0.05%, to settle at $1,230.40 an ounce. It settled 0.8% higher on Wednesday, then climbed in overnight. March silver fell 5.3 cents, or 0.4%, to $14.402 an ounce.
Oil futures finished higher on Thursday, 29 November 2018 bouncing back from an earlier decline that pulled the U.S. crude benchmark below $50 a barrel for the first time since October 2017.
West Texas Intermediate crude for January delivery on the New York Mercantile Exchange rose $1.16, or 2.3%, to settle at $51.45 a barrel after trading as low as $49.
Looking ahead, investors will receive the Chicago PMI for November on Friday.
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