US stocks fell on Thursday, 12 June 2014 as a spike in oil prices and softer-than-expected economic data dented sentiment on Wall Street. Equities slumped out of the gate following some disappointing economic data and reports of skirmishes in northern Iraq. As unrest in Iraq intensified, concerns over supply sent crude oil prices soaring. While energy companies benefited from higher oil prices, airline companies were hit hard.
The Dow Jones Industrial Average finished 109.69 points, or 0.7%, lower at 16,734.19. The Nasdaq Composite ended the day down 34.30 points, or 0.8% at 4,297.63. The S&P 500 fell for the third straight session, closing 13.77 points, or 0.7%, lower at 1,930.12.
Eight out of ten sectors ended lower led by consumer discreyionarya nd consumer staples sectors. Energy and utilities sectirs ended higher.
Shares in airline companies were hit badly on Wednesday following a profit warning from Deutsche Lufthansa tumbled again on Thursday because of higher oil prices. Delta Air Lines dropped 5.4%. Southwest Airlines fell 4.5%, American Airlines Group, lost 4.9%.
Iraq is back in the news headlines again, as civil war has broken out in that country amid escalating violence. Crude oil prices were sharply higher on Thursday, mostly on the Iraq news. The bigger worry is that the violence in Iraq could spread to other Arab countries.
There weren't any major surprises with the initial claims report for the week ending 7 June 2014. It showed claims increasing by 4,000 to 317,000. That was roughly in-line with the consensus estimate, which was pegged at 315,000. The four-week moving average for this series jumped by 4,750 to 315,250. Continuing claims for the week ending 31bMaybincreased by 11,000 to 2.614 mln, which was better than consensus estimate of 2.638 mln.
Total retail sales for May increased 0.3%. Excluding autos, they were up 0.1%. Those results were below the consensus estimates, which called for increases of 0.7% and 0.4%, respectively.
Separately, April business inventories rose 0.6%, while the consensus expected an uptick of 0.4%. This followed the prior month's unrevised increase of 0.4%.
In other overnight news, industrial production in the European Union rose 0.8% in April from March and was up 1.4% year-on-year. The increase was a bit larger than forecast.
Bullion metals rallied on Thursday, 12 June 2014 at Comex. Gold prices rallied to log their highest settlement in nearly three weeks as growing unrest in Iraq and weakness in U.S. equities drove demand. The weaker U.S. dollar index Thursday also fell into the camp of gold market bulls.
Gold for August delivery rose $12.80, or 1%, to settle at $1,274 an ounce on the Comex division of the New York Mercantile Exchange. July silver on Thursday, rose 36 cents, or 1.9%, to end at $19.53 an ounce, the highest close for a most-active contract since mid-May.
Crude-oil futures ended higher above $106 a barrel on Thursday, 12 June 2014 with the U.S. benchmark marking its highest close in almost nine months as unrest in Iraq intensified, raising concerns about potential disruptions to the nation's oil supplies.
July crude oil, the U.S. benchmark, tacked on $2.13, or 2%, to settle at $106.53 a barrel on the New York Mercantile Exchange.
Indian ADRs ended mostly lower on Thursday. In the IT space, Infosys shed 1.95% at $53.69 and Wipro fell 0.17% at $11.52. In the banking space, ICICI Bank was up 0.39% at $52.12 and HDFC Bank rose 2.11% at $48.47. In the other sectors, Tata Motors declined 0.38% at $39.13 and Dr Reddy's Laboratories was down 0.24% at $40.82.
Participation left a bit to be desired as only 610 million shares changed hands at the NYSE.
Tomorrow, May PPI (consensus 0.2%) and core PPI (consensus 0.1%) will be reported at 8:30 ET, while the June Michigan Sentiment survey (consensus 82.9) will be released at 9:55 ET.
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