Twenty five out of thirty Dow components end lower led by Cisco Systems
U.S. stocks declined on Friday, 27 December 2013 as Wall Street remained unsettled over the lack of progress in budget negotiations on Capitol Hill, with a deadline just days away. Equities have dropped this week on worries that Congress would not manage to pass a budget before Monday's deadline, which would translate into a government shutdown. Three days ahead of federal spending authority expiring, the Senate approved a bill to avoid a government shutdown, but the House now has to approve the legislation.
After a nearly 117-point fall, the Dow Jones Industrial Average retreated 70.06 points, or 0.5%, to end at 15,258.24. The S&P 500 index retreated 6.92 points, or 0.4%, to 1,691.75, with materials retreating the most among its 10 large sectors. Posting a fourth week of gains, the Nasdaq Composite fell 5.83 points, or 0.2%, to 3,781.59 on Friday.
Twenty five out of thirty Dow components ended lower led by Cisco Systems. Among the gainers, Nike jumped 4.7% after the athletic-apparel seller reported fiscal first-quarter profit that beat expectations.
Among other stocks under focus, J.C. Penney fell 13% after the retailer started selling 84 million shares.
Among traditional tech companies, top-weighted names like Apple, Google, and Intel posted losses between 0.2% and 1.8%. Microsoft outperformed, climbing 1.5% amid reports Ford Chief Executive Officer Alan Mulally may become the next CEO of the tech company.
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On the earnings front, shares of Accenture lost 2.4% after the company's cautious first-quarter revenue guidance outweighed its mixed earnings.
Economic data released Friday showed that a gauge of sentiment among consumers was at its weakest level since April. T The final reading of the September University of Michigan Consumer Sentiment Index was revised up to 77.5 from 76.8 in the advance report. The consensus expected the Consumer Sentiment Index to increase to 77.3. Even though sentiment was revised higher in the final release, the index is still well below the final August reading of 82.1. The month-to-month drop in sentiment was in-line with the Conference Board's Consumer Confidence Index, which dropped to 79.7 in September from 81.8 in August.
Consumer sentiment levels normally follow trends in equity prices, gasoline prices, media reports, and unemployment trends. Even though the initial claims level is clearly showing an improvement in labor conditions, consumers still believe that the labor market is not improving. That negative response offset strong gains in the equity market.
Separately, August personal income increased 0.4% after increasing an upwardly revised 0.2% in July. The consensus expected personal income to increase 0.3%. As expected from the August employment report, wages rose a solid 0.4% in August after declining 0.2% in July.
For every stock rising, just over two fell on the New York Stock Exchange, where 648 million shares traded. Composite volume neared 3 billion.
Bullion prices ended higher on Friday, 27 September 2013. Gold prices closed with a more than 1% gain on Friday ahead of a weekend that could yield a decision on whether the U.S. government shuts down next week. Comments from a Federal Reserve official that suggested a bond-buying taper could be pushed out to next year helped spur the precious metal upward.
Gold for December delivery rose $15.10, or 1.1%, to settle at $1,339.20 an ounce on the Comex division of the New York Mercantile Exchange. Prices finished this week 0.5% higher. Silver took gold's lead to edge higher, with the December contract up 6.5 cents, or 0.3%, to $21.83 an ounce. Prices witnessed 0.4% weekly decline.
Crude oil prices remained volatile at Nymex on Friday, 27 September 2013. Oil futures settled with a loss for the week, their third in a row, as traders weighed the potential impact of the looming U.S. budget deadline and mulled the latest developments linked to Syria and Iran. Reports that the United Nations is investigating more chemical attacks in Syria offered some support to oil.
Crude oil for November delivery shed 16 cents, or 0.2%, to settle at $102.87 a barrel on the New York Mercantile Exchange after tapping a high of $103.77. For the week, futures prices lost 1.8%. Including the past two weeks of losses, they're down roughly 7%.
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