Indian ADRs end mostly higher led by ICICI Bank
The U.S. stock market finished a choppy trading day on Wednesday, 05 March 2014 generally lower with blue-chips falling the most, as investors reacted mildly to mostly disappointing economic reports. The major averages posted modest Wednesday losses after spending the entire session inside narrow ranges.
The Dow Jones Industrial Average dropped 35.70 points, or 0.2%, to 16,360.18. The Nasdaq Composite closed in positive territory, gaining 6 points, or 0.1%, to 4,357.97, the highest level since April 2000. The S&P 500 finished roughly where it closed on Tuesday,
The financial sector took the lead shortly after the open and never relinquished its standing as top components rallied notably. Bank of America soared 3.2% while other large names like Citigroup, JPMorgan Chase and Morgan Stanley gained between 1.2% and 2.8%.
U.S. economic data released Wednesday was again on the weak side of market expectations, including the ADP national employment report and the ISM non-manufacturing report on business. The ADP Employment Change report for February indicated an increase of 139K while the consensus called for an increase of 150K. Also of note, the January reading was revised down to 127,000 from 175,000. The ISM Non-Manufacturing Index fell to 51.6 in February from 54.0 in January. That was the weakest print since February 2010 while the consensus expected the index to fall to 53.5. Not surprisingly, many sectors reported that extreme winter weather conditions wreaked havoc on business activity in February. The evidence in the hard data, however, suggests a cyclical slowdown is more likely taking place. The Employment Index fell a whopping 8.9 points to 47.5 in February from 56.4 in January. That ended a 25-month expansion cycle.
On the Ukrainian crisis front, markets have been somewhat assuaged as Russian president Putin on Tuesday said he was not planning on using military force in the Ukraine, even though his additional troops are on the ground there. Putin has also halted his military exercises near the Ukrainian border and ordered troops there back to their bases. The above developments have put risk appetite back into the market place.
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It was reported Wednesday that Chinese officials say they want to keep the world's second-largest economy on a 7.5% annual economic growth path for 2014. That rate is a bit higher than many expected and is a bullish underlying factor for the raw commodity sector. China is the world's largest consumer of raw commodities.
In other news Wednesday, the Euro zone showed stronger economic strength to start 2014, according to the Markit purchasing managers index, which rose to 53.3 in February from 52.9 in January. This particular reading was the highest since June of 2011. Also, European Union retail sales data rose by 1.6% in January from December, which is the best month-on-month growth rate in over a dozen years. These reports fall into the camp of those not looking for any further European Central Bank monetary policy stimulus forthcoming. The ECB holds its monthly monetary policy meeting on Thursday.
Also of note, today featured the release of the March Beige Book from the Federal Reserve. Similar to other reports received during past weeks, the Beige Book highlighted severe weather as a major headwind. To that end, 'weather' was mentioned 119 times in the entire release versus an average of 14 mentions in each previous Beige Book report dating back to 1997.
Eight out of twelve Fed Districts reported continued expansion from January to February with the growth characterized as 'modest' to 'moderate.' Retail sales saw relative weakness across the board, but that was written off as a result of the weather.
Precious metal prices ended slightly higher on Wednesday, 05 March 2014. Prices were supported by some fresh U.S. economic reports that once again favored the weak side of market expectations. Gains in gold were limited on some selling pressure due to ideas the situation in Ukraine has de-escalated and the worst of that crisis is over. Gold futures closed with a modest gain on Wednesday, with news of slower expansion in service-sector companies luring some investors back to the precious metal after a steep price loss in the previous session.
Gold for April delivery tacked on $2.40, or 0.2%, to settle at $1,340.30 an ounce on the Comex division of the New York Mercantile Exchange. May silver closed up 5 cents, or 0.2%, at $21.27 an ounce after a loss of 1.2% in the previous session.
Crude oil futures fell on Wednesday, 05 March 2014 at Nymex and settled under $102 a barrel, at their lowest level in almost three weeks, pressured by a surprise climb in weekly U.S. distillate inventories and concerns over the potential for a slowdown in energy demand. Traders also attributed Wednesday's slip to bets that Russia-Ukraine tensions will continue to ease. Crude oil for April delivery fell $1.88, or 1.8%, to settle at $101.45 a barrel on the New York Mercantile Exchange.
In the latest weekly inventory report, the U.S. Energy Information Administration said crude stockpiles rose 1.4 million barrels for the week ended 28 February 2014. Market was looking for a climb of 1.5 million barrels. The report also showed that gasoline supplies fell by 1.6 million barrels, while distillate stockpiles rose 1.4 million barrels. Gasoline and distillate stockpiles were expected to fall by 1.5 million barrels each.
Indian ADRs ended mostly higher on Wednesday. In the banking space, ICICI Bank rose 3.22% at $37.78 and HDFC Bank jumped 1.73% at $34.60. In the IT space, Infosys gained 1.05% at $62.52 and Wipro was down 0.07% at $14.12. In the other sectors, Tata Motors slipped 1% at $34.63 and Dr Reddy's Laboratories rose 0.67% at $46.31.
Tomorrow, the February Challenger Job Cuts report will be released at 7:30 ET while weekly initial claims, fourth quarter productivity, and unit labor costs will be announced at 8:30 ET. The day's data will be topped off with the factory orders report for January.
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