Reading on U.S. manufacturing tops expectations
U.S. stocks mostly pulled back on Tuesday, 02 September 2014 as the S&P 500 lost a little steam after achieving a record close on Friday. It was just a mixed day with modest point changes on either side of the unchanged mark for the major indices. A reading on U.S. manufacturing topped expectations but didn't spark an advance, with the stock market instead starting off September on a down note.
The Dow Jones Industrial Average fell 30.89 points, or 0.2%, to 17,067.56, while the Nasdaq Composite gained 17.92 points, or 0.4%, to 4,598.19. The S&P 500 edged down 1.09 points, or less than 0.1%, to 2,002.28.
Five out of ten sectors ended in the red led by energy sectors. Exxon Mobil and Chevron were the Dow's worst performers. It was followed by the utilities sector which traded lower as Treasury yields moved higher.
There was a hefty slate of U.S. economic data out Tuesday, including the U.S. manufacturing PMI, construction spending, the IBD/TIPP economic optimism index, the ISM manufacturing report, and the global manufacturing PMI. This data was generally upbeat.
The Institute for Supply Management's August factory gauge climbed to the highest since March 2011 as orders grew by the most in a decade, according to a report today. U.S. government data showed construction spending increased more than analysts forecast in July. The nation is the world's largest copper consumer after China.
It's a big week for economic data points that are likely to be market sensitive for the precious metals. The highlights are Thursday's European Central Bank meeting and Friday's U.S. jobs report. The market place reckons the ECB is on the verge of announcing fresh monetary stimulus. And the U.S. jobs report will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August.
The OECD reported Monday that inflation in its 34 world member economies fell again, at 1.9% in July from 2.1% in June, year-on-year. The OECD said the slowing inflation rate reflects continued weak overall world economic growth. The report is yet another worrisome clue that deflationary price pressures are lurking in the entire world economic system. Such is a bearish factor that has contributed to the present downward trend in the raw commodity sector.
The information technology sector also outperformed. It got a boost from Apple which shot down accusations its iCloud service got hacked.
Separately, there were some rumblings that there may have been a customer data breach at Home Depot stores. That allegation sent the home improvement retailer lower and left it as one of the Dow's worst-performing components.
Staples jumped 8.1%, performing best among S&P 500 stocks, after Credit Suisse hiked its rating for the retailer to outperform. Tesla Motors jumped 5.3%, also achieving a closing record, as Stifel Nicolaus hiked its rating for the car company to buy and set a $400 price target.
Bullion prices ended lower at Comex on Tuesday, 02 September 2014. The Ukraine risk premium failed to keep gold from tracking lower on Tuesday, as attention turned back to equities following the Labor Day holiday. A stronger U.S. dollar index that hit a 13-month high and sharply lower crude oil prices sunk the yellow metal. No major geopolitical flare-ups during the long U.S. holiday weekend also prompted weak long liquidation in gold futures.
Gold for December delivery ended down $22.3, or 1.8%, to $1,265.20 an ounce. September silver slipped 8 cents, or 0.4%, to $19.32 an ounce.
A strong dollar and continued concerns about demand on Tuesday, 02 September 2014 pulled crude-oil futures to their lowest settlement since January at Nymex. Brent futures ended at their lowest in nearly 18 months, as other energy commodities also notched multi-month lows.
Crude for October delivery fell $3.08, or 3.2%, to $92.88 a barrel on the New York Mercantile Exchange. That was the lowest settlement since mid January and one that snaps a four-day winning streak for the commodity. Oil had ended last week up 2.5%, but lost 2.3% in August. The geopolitical tensions persisted across the globe, but crude-oil traders focused on the prospect of softer supply and demand fundamentals going forward.
Volume remained on the light side with just 578 million shares traded at the NYSE.
Wednesday's session will feature the Mortgage Applications, Factory Orders, Beige Book, and Auto Sales reports.
Powered by Capital Market - Live News
