Dow manages to eke out small gains
U.S. stocks closed mostly lower on Tuesday, 15 July 2014 dragged down by sharp declines in momentum stocks.The major averages posted modest losses after being unable to hold their opening gains. A positive start early in the session on better-than-expected results from J.P. Morgan Chase and Goldman Sachs and generally positive economic data fizzled out when Fed Chairwoman Janet Yellen began her two-day congressional testimony.
The Dow Jones Industrial Average ended the day 5.3 points higher at 17,060.75, after setting an intraday record in the morning. The Nasdaq Composite dropped 24.03 points, or 0.5%, to 4,416.39. The S&P 500 recovered some of the losses, but closed 3.78 points, or 0.2%, lower at 1,973.32.
Consumer discretionary, energy and healthcare stocks led the dceline.
In earnings news, J.P. Morgan Chase reported better-than-expected earnings. Shares rose 3.5%. Goldman Sachs reported second-quarter earnings beating Wall Street estimates. Goldman shares rose 1.3%. Yahoo shares rose over 3% in after-hours trade after reporting second-quarter results that were in line with expectations. Intel also rose 3.4% after-hours, following quarter reports.
In the tech sector, social media names lagged, but were able to trim some of their losses. Facebook, Twitter and Yelp lost between 1.1% and 2.9%.
More From This Section
Federal Reserve Chair Janet Yellen's testimony to the U.S. Senate coincided with commodities' late-morning sell off. However, her remarks appeared not to have prompted the price pressure in gold. Yellen, who was testifying in front of the Senate Banking Committee, said hiking interest rates is not a panacea for easing financial stability risks.
The lack of fresh concerns about the geopolitical front have led to better risk appetite in the market place early this week. However, four situations remain simmering on low heat on the back burner of the market place: the European Union sovereign debt crisis, the Iraqi civil war, the latest flare-up between Israel and Hamas, and the Russia-Ukraine tensions.
In overnight news there was yet another downbeat economic report coming out of the European Union. The German ZEW economic expectations index came in at 27.1 in July versus 29.8 in June. The forecast was for a reading of 28.0. On Monday the International Monetary Fund (IMF) urged the European Central Bank to implement quantitative easing of its monetary policy, to help spur economic growth and to ward of deflationary price pressures.
Economic data at Wall Street today included June Retail Sales, June import/export prices, July Empire Manufacturing survey, and the Empire Manufacturing Survey. Retail sales increased 0.2% in June following an upwardly revised 0.5% (from 0.3%) increase in May, while the consensus expected an increase of 0.7%. Excluding motor vehicles, retail sales increased a 0.4% in June, which was the same growth rate following an upward revision (from 0.1%) in May. The consensus expected these sales to increase 0.6%
The Empire Manufacturing Survey for July registered a reading of 25.6, which was well ahead of the prior month's reading of 19.3. Business inventories increased 0.5% in May following an unrevised 0.6% increase in April, while the consensus expected business inventories to increase 0.6%.
Bullion prices ended lower at Comex on Tuesday, 15 July 2014. Gold prices reversed earlier gains to close lower for a third session on Tuesday in the wake of dovish comments from Federal Reserve Chairwoman Janet Yellen. A firmer U.S. dollar and Nymex crude oil futures dropping to a two-month low, below $100 a barrel, were bearish "outside markets" on Tuesday that helped to pressure gold.
Gold for August delivery slid $9.60 to $1,297.10 an ounce. On Monday, prices took their hardest hit of the year, dropping 2.3% amid an investor rush into equities. September silver also slipped, edging down 3 cents to $20.89 an ounce.
Crude-oil futures succumbed to renewed selling pressure on Tuesday, 15 July 2014 pushing the U.S. benchmark back below $100 a barrel for the first time since May.
On the New York Mercantile Exchange light, sweet crude futures for delivery in August were down 95 cents, or 0.9%, to settle at $99.96 a barrel after trading as low as $99.01.
Participation bucked the recent trend with an above-average 716 million shares changing hands at the NYSE.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while June PPI will be reported at 8:30 ET. The Net Long-Term TIC Flows report for May will cross the wires at 9:00 ET, while June Industrial Production and Capacity Utilization will both be announced at 9:15 ET. The busy day of data will also include the 10:00 ET release of the NAHB Housing Market Index for July and the July Fed Beige Book, which will be released at 14:00 ET.
Powered by Capital Market - Live News