All ten economic sectors settled in the red
U.S. stocks fell on Wednesday,30 October 2013 as investors assessed a Federal Reserve statement that largely matched forecasts, but also had some Fed watchers saying a policy change could come sooner than expected. Stocks held modest losses into the afternoon, but slid to fresh lows after the Federal Reserve released its latest policy directive, which was little changed from prior statements.
The Dow Jones Industrial Average finished down 61.59 points, or 0.4%, to 15,618.76. The Nasdaq Composite declined 21.72 points, or 0.6%, to close at 3,930.62. The S&P 500 finished down 8.64 points, or 0.5%, at 1,763.31, snapping a four-day winning streak.
All ten sectors settled in the red, but their losses were limited. Consumer staples ended at the bottom of the leader board. Meanwhile, utilities ended among the laggards.
The central bank said it will continue its monthly bond-buying program, citing an elevated unemployment rate and saying Washington's economic policies are still holding back growth. Most notably, the directive acknowledged the recent slowdown in the housing sector and noted that fiscal policy is presenting a headwind to growth. In addition, the Committee dropped the reference to "tightening financial conditions" that appeared in the September statement.
Looking back at today's economic data, the CPI increased 0.2% in September after ticking up 0.1% in August. The consensus expected headline CPI growth of 0.1%. Energy prices, which fell 0.3% in August, were up 0.8% in September. That was the strongest increase since prices rose 3.4% in June. Food prices were flat in September after increasing 0.1% for the previous two months. Unlike the PPI, there were no large moves in any one sector. Food price movements were generally weak, up or down, across the board. Excluding food and energy, core CPI increased 0.1% in September for a second consecutive month. That was exactly what the consensus expected.
Separately, according to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 130K in October. This was a bit above the increase of 125K expected by the consensus.
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Lastly, the weekly MBA Mortgage Index rose 6.4% to follow last week's decline of 0.6%.
Trading volume was well below average as only 697 million shares changed hands on the floor of the New York Stock Exchange.
December crude oil extended yesterday's losses following a higher-than-expected climb in stockpiles. The EIA reported that for the week ending Oct 25, crude oil had a build of 4.1 million barrels when consensus called for a smaller build of 2.3 million barrels. The energy component touched a session low of $96.59 per barrel moments before settling with a 1.6% loss at $96.72 per barrel.
December gas chopped around between positive and negative territory, with prices trading in a tight range between $3.61 and $3.65 per MMBtu. It eventually settled 0.3% lower at $3.62 per MMBtu.
December gold traded higher ahead of the 14:00 ET release of the latest policy directive from the FOMC. A slightly weaker dollar index also boosted prices. The yellow metal advanced to a session high of $1359.60 per ounce in morning action and settled with a 0.3% gain at $1348.90 per ounce. December silver climbed to a session high of $23.09 in early morning pit trade. Prices held steady near the $23.00 per ounce level for most of the session and settled 2.2% higher at $22.98 per ounce. Silver fell to a low of $22.45 per ounce in electronic trade and is currently 0.7% higher at $22.65 per ounce.
Tomorrow, October Challenger Job Cuts will be released at 7:30 ET and weekly initial claims will be reported at 8:30 ET. The day's data will be topped off with the 9:45 ET release of the Chicago PMI for October.
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