Stocks end lower despite better than expected data
US stocks ended lower once again at Wall Street on Tuesday, 06 August 2013. Stocks slipped out of the gate after today's better-than-expected economic data was unable to spark an opening bid. Stocks extended losses into a second day Tuesday as Federal Reserve official Charles Evans said the economy should be able to shoulder reduced Fed asset purchases later this year.
The Dow Jones Industrial Average he shed 93.39 points, or 0.6%, to end at 15,518.74. The S&P 500 index fell 9.77 points, or 0.6%, to 1,697.37, with materials pacing broad sector declines. The Nasdaq Composite shed 27.18 points, or 0.7%, to 3,665.77.
Twenty four out of thirty Dow components ended lower led by IBM.
IBM's shares fell 2.3% after the computer-services company reportedly said U.S. employees in its hardware unit would take a week furlough with reduced pay in August and after Credit Suisse downgraded the tech giant to underperform from neutral.
In overnight news, there was more upbeat economic data coming out of the European Union on Tuesday. Germany's manufactured goods orders increased by 3.8% in June versus May. However, European stock markets languished in quiet, summertime trading. Asian stock markets were mostly weaker in dull trading as the world market place awaits fresh macro inputs. The Reserve Bank of Australia cut its main interest rate by 0.25%, to a record low of 2.5% on Tuesday.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.1% on Tuesday.
Among economic data expected at Wall Street today, the June trade deficit narrowed to $34.2 billion from May's downwardly revised $44.1 billion (from $45.0 billion). That was the smallest monthly trade deficit since October 2009. The consensus expected the deficit to fall to $43.4 billion. In the advance estimate for second quarter GDP, the Bureau of Economic Analysis assumed the trade deficit widened slightly in June. This huge downward surprise will likely add at least 0.5 percentage points to second quarter growth.
June exports increased by $4.1 billion to $191.2 billion, representing the largest amount of exports, nominal or real, on record. On the flip side, imports fell by $5.8 billion to $225.4 billion. Nearly the entire decline in imports was due to a drop in petroleum-based demand (-$2.0 billion) and a softening in cell phone imports (-$1.5 billion).
Results from retailers also disappointed investors, with American Eagle Outfitters sliding 12% a day after the teen-apparel retailer slashed its second-quarter outlook. J.C. Penney retreated 3.9%. Bucking the negative trend, Fossil Group rose nearly 18% after the fashion-accessories supplier reported better-than-expected results and raised its 2013 earnings forecast.
Crude-oil prices ended lower on Tuesday, 06 August 2013 at Nymex. U.S. crude-oil futures retreated on Tuesday, taking a cue from the stock market's drop, then trimmed their loss in electronic trading after weekly supply data. Light and sweet crude for September ended lower by $1.26 (1.2%) at $105.3 a barrel on the New York Mercantile Exchange on Tuesday.
Bullion metal prices ended lower on Tuesday, 06 2013 at Comex. Gold and silver prices slid as investors wrestled with uncertainty about the Federal Reserve's timeline for reducing monetary stimulus. Gold dropped for sixth straight day.
Gold for December delivery ended lower by $19.9 (1.5%) at $1,282.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. September silver ended lower by $0.20 (1%) at $19.52 an ounce on Tuesday.
For every stock rising, roughly three fell on the New York Stock Exchange, where 658 million shares traded. Composite volume cleared 3.1 billion.
Indian ADRs ended lower on Tuesday. In the IT space, Infosys was down 1.3% and Wipro was down 1.2%. In the Banking space, HDFC Bank was down 5.3% and ICICI Bank was down 2.5%. In other space, Tata Motors was down 2.3%, and Sterlite was down 5.8%.
Tomorrow, the MBA Mortgage Index is the only economic report expected along with weekly crude inventory data and plenty of earning reports.
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