US stocks ended with strong losses on Wednesday, 17 April 2013. Indices kicked off the day in the red but were off session lows on Wednesday afternoon after the Federal Reserve's Beige Book found the U.S. economy to be growing at a moderate pace. There was no single catalyst responsible for today's decline. Instead, persistent global growth concerns coupled with rumors of a possible downgrade of France and Germany set the stage for a sharply lower open.
For the day, the Dow ended lower by 138.19 points (0.94%) at 14,618.59. Nasdaq ended lower by 59.96 points (1.84%) at 3,204.67. S&P 500 ended lower by 22.56 points (1.43%) at 1,552.01. Dow was trading lower by 195 points earlier during the day.
Most of the ten economic sectors ended lower led by energy, industrial and financial sector. Twenty-six out of thirty Dow components ended lower led by Bank of Americ and Caterpillar.
Latest data showed that European car sales are sliding to a 20-year low as demand plunged last month in Germany. The Federal Reserve said yesterday in its Beige Book business survey the U.S. economic expansion remained moderate. China's first-quarter gross domestic product growth and fixed-asset investments, as well as March industrial production trailed economists' forecasts. All these factors weighed on market sentiments.
Among major stocks under focus, B. of A. shares slid 4.7% after the lender reported first-quarter earnings below Wall Street's estimates as its mortgage business weighed. Caterpillar fell 1.4% after Macquarie downgraded the construction-equipment maker to neutral from outperform. Apple fell as low as $398.11, its first foray under $400 since September 2011, and closed off 5.5% at $402.80.
In addition to the broad market pressure, disappointing guidance from Apple supplier Cirrus Logic fueled speculation regarding the health of its largest customer. But Intel was a bright spot among tech shares after the company reported in-line earnings and revenue. However, other chipmakers did not benefit from Intel's results.
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The Wednesday afternoon release of the U.S. Federal Reserve's beige book offered no surprises and had little impact on the commodity markets. The beige book said U.S. economic growth continues at a moderate pace, with a pick-up in residential construction.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.9% on Wednesday.
Crude-oil prices ended substantially lower on Wednesday, 17 April 2013 at Nymex. Prices ended lower despite the EIA reporting big drop in crude supplies for last week. A strong dollar pressured crude prices. Light and sweet crude for May ended lower by $2.04 (2.3%) at $86.68 a barrel on the New York Mercantile Exchange on Tuesday.
In the weekly inventory report, the EIA reported Wednesday that crude supplies fell 1.2 million barrels for the week ended 12 April 2013. Market had expected a 1.25 million-barrel climb. But the EIA's reported supply fall was well below that of the 6.7 million-barrel drop the American Petroleum Institute data showed late Tuesday.
The EIA also said distillate stockpiles, which include heating oil, rose by 2.4 million barrels, though market was looking for a decline of 850,000 barrels. Motor gasoline supplies fell by 600,000 barrels, less than the forecast for a decline of 1.1 million barrels.
The Wednesday afternoon release of the U.S. Federal Reserve's beige book offered no surprises and had little impact on the precious metals or other markets. The beige book said U.S. economic growth continues at a moderate pace, with a pick-up in residential construction.
Bullion metal prices ended lower on Wednesday, 17 April 2013. Prices of gold and silver prices failed to stick to initial gains and turned pale as they were hammered by a strong dollar.
Gold for June delivery ended lower by $4.7 (0.3%) at $1,382.7 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. Prices had It touched a low of $1,365 as well as a high of $1,395.20 during intra day trading. May silver ended lower by $0.32 cents (1.4%) at $23.307 an ounce on Wednesday.
For every stock that rose, nearly four fell on the New York Stock Exchange, where 866 million shares traded. Composite volume surpassed 4.2 billion.
Indian ADRs ended mixed on Wednesday. In the IT space, Infosys was down 2% and Wipro was down 2.7%. In the Banking space, HDFC Bank was down 1.3% and ICICI Bank was down 0.7%. In the Telecom space, Tata Communication was up 0.6%. In other space, Tata Motors was down 3.2%, Dr Reddys was up 0.7% and Sterlite was up 2%.
Tomorrow, weekly initial and continuing claims will be reported at 8:30 ET while March leading indicators and the April Philadelphia Fed Survey are both set to cross the wires at 10:00 ET. Among earnings of note, Freeport-McMoRan and PepsiCo will report their results before the opening bell.
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