Indian ADRs end strictly lower too
The stock market finished Thursday, 03 April 2014 session on a lower note with small caps leading the weakness. Equity indices began the day with modest gains, but were quick to slip into the red, where they remained for the rest of the session. Initial reaction to Thursday's economic reports was muted. Weekly jobless claims rose by more than expected, the U.S. trade deficit gap widened by more than forecast and the ISM services index rose in line with estimates.
Of the major averages, the Nasdaq faced the most aggressive selling due to the daylong weakness in biotechnology and an afternoon slump in the technology sector.
The Dow Jones Industrial Average closed down less than a point at 16,572.55. The Nasdaq Composite finished the day down 38.72 points, or 0.9%, at 4,237.74. The S&P 500 ended the day 2.13 points, or 0.1%, lower at 1,888.74.
The European Central Bank held its monthly monetary policy meeting on Thursday. The ECB made no major policy changes, which was the outcome expected by most. However, at this press conference ECB president Mario Draghi sounded very dovish on monetary policy. His remarks helped to pressure the Euro currency, which in turn supported the U.S. dollar index.
In other overnight news, the Markit data firm reported Thursday the EU's composite purchasing managers index fell to 53.1 in March from 53.3 in February. A reading above 50.0 suggests expansion. However, the survey said businesses reduced their prices for the 24th month in a row.
The Chinese government on Thursday announced a $24 billion stimulus plan in the form of railway improvements. Also, the HSBC China purchasing managers' index rose to 51.9 in March from 51.0 in February. Asian equity markets were supported on the China stimulus and PMI news.
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U.S. economic data released Thursday included the weekly jobless claims report, the Challenger job cuts report, the international trade report, the global services PMI, and the U.S. services PMI. This data was a mixed bag but slightly favored the weak side of expectations.
The weekly initial claims level increased to 326,000 from a revised 310,000 (from 311,000). The consensus expected the initial claims level to increase to 320,000. The U.S. trade deficit increased to $42.30 billion in February from a slightly upwardly revised $39.30 billion (from $39.10 billion) in January. That was the largest deficit since reaching $43.40 billion in September 2013. The goods deficit rose to $61.70 billion in February from $59.50 in January, an increase of $2.20 billion. The services surplus fell $800 million to $19.40 billion in February from $20.20 billion.
Separately, the ISM Non-Manufacturing Index increased to 53.1 in March from 51.6 in February while the consensus expected an increase to 53.5. The increase in the headline index was mostly the result of a recovery in employment. The Employment Index, which contracted in February, increased to 53.6 in March from 47.5.
Arguably the most important economic data point of the week and of the month is Friday's March U.S. employment report from the Labor Department. The key non-farm payrolls number is expected to be up 200,000.
Among individual stocks, shares of Plug Power rose 2% after the company said it bought Washington-based fuel-cell developer ReliOn Inc., for $4 million in stock. Monsanto rose 2.3% a day after reporting earnings that topped estimates.
Bullion prices ended lower on Thursday, 03 April 2014 at Comex. Gold prices ended the U.S. day session moderately lower giving back more than half of what they gained a day earlier as the U.S. dollar edged higher in the wake of the European Central Bank's decision to leave interest rates unchanged. Traders also positioned themselves ahead of highly anticipated U.S. jobs data due Friday.
Gold for June delivery fell $6.20, or 0.5%, to $1,284.60 an ounce on the Comex division of the New York Mercantile Exchange. May silver dropped 24.5 cents, or 1.2%, to $19.805 an ounce.
Crude oil prices edged higher on Thursday, 03 April 2014 to reclaim the $100-a-barrel level in New York, finding some support from news of a climb in U.S. service-sector growth last month, but uncertainty surrounding a potential deal with Libyan rebels to reopen oil ports reports and higher US dollar kept price gains in check.
Crude oil for May delivery climbed 67 cents, or 0.7%, to settle at $100.29 a barrel for the New York Mercantile Exchange session.
Indian ADRs saw selling pressure on Thursday. Among banks, ICICI Bank lost 3.61% to $42.72 per ADR and HDFC Bank declined 2.05% to $40.52. In the technology space, Infosys was down 0.9% to $55.17 and Wipro slipped 2.25% to $13.47. Among others, Tata Motors dropped 1.25% to $36.34 and Dr Reddy's Laboratories was down 2.41% to $44.06.
Tomorrow's data will focus on jobs with March Nonfarm Payrolls (consensus 195K), Private Payrolls (consensus 205K), Unemployment Rate (consensus 6.6%), Hourly Earnings (consensus +0.2%), and Average Workweek (consensus 34.4) all set to cross the wires at 8:30 ET.
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