Indian ADRs end strictly lower though
US stocks ended Wednesday, 04 June 2014 with modest gains. For the third day in a row, the stock market maintained a narrow range amid spotty sector leadership. A mixed bag of economic reports sent shares lower in early trade, but investors appeared to have shrugged them off by the afternoon.
The Dow Jones Industrial Average rose 15.19 points, or 0.1%, to 16,737.53. The Nasdaq Composite ended the day up 17.56 points, or 0.4%, at 4,251.64. The S&P 500 closed near session highs, up 3.62 points, or 0.2%, at 1,927.86.
The ten economic sectors had a mixed finish. While consumer discretionary, technology and finnacials ended higher, energy and industrials posted slim losses.
Thursday's highly anticipated monthly monetary policy meeting of the European Central Bank is widely believed to see the bank announcing fresh monetary policy stimulus measures. Many believe the ECB refinancing rate will be reduced by around 10 or 15 basis points as well as a reduction in the deposit rate to just below zero, for a slightly negative return.
Thursday's U.S. ADP national employment report came in at up 179,000 jobs for May. That figure is lower than the 215,000 figure expected for the non-farm payrolls growth in this Friday's U.S. jobs report. The ADP report hints the jobs report Friday could be a slight miss to the downside.
Wednesday afternoon's Federal Reserve beige book was released and markets barely moved as there was nothing new in the report.
Also Read
In overnight news, the European Union's business activity slowed down in May. The Markit composite purchasing managers' index for the Euro zone came in at 53.5 versus 54.0 in April. Also, EU gross domestic product for the first quarter was reported at an unrevised increase of 0.9%, year-on-year. Euro zone producer prices fell 0.1% in May from April and were down 1.2% year-on-year. These figures only increase concerns about deflationary price pressures gripping the European Union.
The recent strength of the U.S. dollar against the other major world currencies recently has been a bearish underlying factor for the gold and silver markets. The U.S. dollar index, which is a basket of six major currencies weighted against the greenback, hit a two-month high this week.
Among other data expected at Wall Street, the trade deficit in April widened appreciably to $47.20 billion from an upwardly revised $44.20 billion (from -$40.40 billion) in March. The April number was worse than the consensus estimate of -$41.30 billion and was the biggest deficit since March 2012. This will be a negative component for Q2 GDP as the real trade deficit in April was 9.2% greater than the first quarter average.
First quarter productivity was revised lower to -3.2% (consensus -2.5%) from -1.7%. That was the largest decrease in productivity since the first quarter of 2008. Hours worked increased 2.2% and output decreased 1.1%. Unit labor costs, in turn, were revised up to 5.7% (consensus 4.8%) from 4.2% due to the decline in productivity and the 2.3% increase in hourly compensation.
The ISM Services report for May checked in at 56.3, which was above the consensus estimate of 55.5 and marked the highest reading for the survey since August 2013. The main takeaway was that the non-manufacturing sector continues to operate comfortably in a state of expansion as May 2014 marked the 52nd consecutive month with a reading above 50.0. Also, the weekly MBA Mortgage Index fell 3.1% to follow last week's downtick of 1.2%.
In deal news, Protective Life Corp. jumped 18% after Japan's Dai-ichi Life Insurance said it plans to buy the U.S.based life insurer for $5.7 billion.
Also of note, the tech space received significant support from its largest component. Shares of Apple spiked 1.1% on the record date for the upcoming 7:1 stock split. Starting Monday, the largest tech company by market cap will begin trading on a split-adjusted basis.
Bullion prices ended the U.S. day session near unchanged levels Wednesday, 04 June 2014. The precious metals were treading water and settling with a modest decline as traders looked ahead to monthly U.S. jobs data and the outcome of the European Central Bank meeting for guidance.
Gold for August delivery fell 20 cents to settle at $1,244.30 an ounce on the Comex division of the New York mercantile Exchange. July silver rose 3 cents, or 0.2%, to $18.79 an ounce.
Crude Oil futures settled little changed on Wednesday, 04 June 2014 losing hold of the $103-a-barrel level they saw during the session as traders assessed a U.S. government report showing a bigger-than-expected weekly decline in crude supplies, along with rising gasoline and distillate stockpiles.
July crude shed 2 cents to settle at $102.64 a barrel on the New York Mercantile Exchange. Prices, which were trading at around $103.50 before the supply data, had climbed more to touch highs closer to $103.59 immediately after the data release but gave up those gains by the close.
In the latest EIA report, the U.S. Energy Information Administration said crude stockpiles fell 3.4 million barrels for the week ended 30 May 2014. Market had forecast a decline of 2 million barrels. As for the petroleum products, gasoline supplies rose by 200,000 barrels, while distillate stockpiles climbed by 2 million barrels. Gasoline stockpiles were expected to climb by 2 million barrels, but distillates, which include heating oil, were seen down 1 million barrels.
Trading volume remained light with just 579 million shares changing hands at the NYSE versus a long-term average of 700 million.
Indian ADRs ended lower on Wednesday. In the IT space, Infosys shed 1.27% at $51.31 and Wipro was down 0.55% at $10.87. Among the banking names, ICICI Bank declined 0.63% at $50.70 and HDFC Bank fell 0.4% at $47 per ADR. In the other sectors, Tata Motors slipped 0.58% at $37.42 and Dr Reddy's Laboratories shed 1.01% at $39.20.
Tomorrow, Challenger Job Cuts for May will be reported at 7:30 ET, while weekly Initial Claims (consensus 310,000) will be released at 8:30 ET.
Powered by Capital Market - Live News