JP Morgan Chase remains the biggest Dow decliner
US stocks ended in the red at Wall Street on Thursday, 12 September 2013. Stocks fell as investors worried about developments related to Syria and Federal Reserve policy moves. Stocks slid to their lows following comments from John Boehner and Harry Reid. House Speaker Boehner said that spending reforms must be implemented in order to increase the debt ceiling. The Speaker also commented on Syria, saying that he has doubts about the plan to put Syria's chemical weapons under international control.
The Dow Jones Industrial Average dropped 25.96 points, or 0.2%, to 15,300.64. The Nasdaq Composite lost 9.04 points, or 0.2%, to 3,715.97. The S&P 500 dropped 5.71 points, or 0.3%, to 1,683.42,
J.P. Morgan Chase fell 1.9%, making the bank the biggest decliner in the Dow. Materials and financials posted the biggest losses among the 10 major industry groups.
Shares of Walt Disney rallied 2.4% after reports that the media conglomerate plans to repurchase between $6 billion and $8 billion in shares in the New Year.
In today's economic data, weekly initial claims fell below the 300,000 level for the first time since March 2006. However, the Department of Labor said the sharp drop was due to computer problems. The initial claims level declined to 292,000 for the week ending September 7 from an unrevised 323,000 for the week ending 31 August. The consensus expected the initial claims level to increase to 327,000.
The DoL announced that two states upgraded their computer systems, which resulted in an unexpected drop in claims. It is unknown how long the computer errors will remain in the system and it could affect the data for the next few weeks. It should be reiterated that the DoL does not believe the drop in claims this week signals a change in labor market conditions. Conditions remain better than where they were a few months ago but nowhere near as strong as a sub-300,000 reading would suggest.
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Separately, export prices, excluding agriculture, ticked down 0.1% in August after an unchanged prior reading. Excluding oil, import prices declined 0.2%, which follows last month's decline of 0.4%.
Improved investor risk appetite is the feature in the market place this week. However, the specter of U.S. military action against Syria has receded significantly this week, amid a Russian plan to have Syria's chemical weapons placed under international control. U.S. Secretary of State Kerry will meet with his Russian counterpart Thursday in Geneva, Switzerland, to discuss the matter.
Many traders and investors are looking ahead to next week's meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). A majority of the market place believes the U.S. central bank at next week's meeting will announce it will begin to scale back, or taper its monthly bond-buying program. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of next week's FOMC meeting. The selling pressure in gold and silver, and some other commodity markets, could also be tied to traders and investors anticipating the Fed tapering move next week.
Bullion metal prices ended lower on Thursday, 12 September 2013 at Comex. Gold prices dropped more than 2% on Thursday as expectations that the U.S. Federal Reserve will announce a decision to taper its stimulus measures at a meeting next week helped push prices to their lowest level in a month.
Gold for December delivery ended lower by $33.20 (2.4%) at $1,330.6 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. December silver fell $1.02, or 4.4%, to $22.15 an ounce on Comex on Thursday.
Crude futures posted modest gains on Thursday as the International Energy Agency issued an upbeat forecast for global oil demand next year. Crude oil for October delivery rose $1.04, or 1%, to settle at $108.60 a barrel on the New York Mercantile Exchange.
More than 642 million shares traded on the New York Stock Exchange. Composite volume surpassed 3 billion shares.
Indian ADRs ended lower on Thursday. In the IT space, Infosys was down 1.1% and Wipro was down 3%. In the Banking space, HDFC Bank was down 1.5% and ICICI Bank was down 2.7%. In other space, Tata Motors was down 2.3% and Dr Reddys was down 0.6%.
Tomorrow, August retail sales, retail sales ex-auto, PPI, and core PPI will all be reported at 8:30 ET. In addition, the preliminary reading of the September University of Michigan Consumer Sentiment Survey and July business inventories will be released at 9:55 ET and 10:00 ET, respectively.
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