US stocks ended with big losses on Wednesday, 05 June, 2013. Stocks tumbled on Wednesday for a second session as data on U.S. private-sector job growth darkened views of the monthly nonfarm-payrolls report to be released in two days. Steady selling persisted throughout the session. Economic data was plentiful today.
For the day, the Dow ended lower by 216.95 points, or 1.4%, to 14,960.59. The Nasdaq Composite fell 43.78 points, or 1.3%, to 3,401.48. The S&P 500 index declined 22.48 points, or 1.4%, to 1,608.90.
Materials and financials led losses that included all of its 10 major industry groups. Intel paced declines that included all of its 30 components.
General Motors fell 2.7% after the U.S. Treasury said it would sell 30 million more shares of the car manufacturer's common stock.
The afternoon release of the Federal Reserve's beige book contained no surprises and the market place reacted little to the results.
Euro zone economic data released Wednesday continued to show weakness, which put downside pressure on the Euro currency. Retail sales fell by 0.5% in April and were down 1.1% year-on-year. The Markit data company reported its reading on manufacturing and service sectors was 47.7 in May from 46.9 in April. Any reading below 50.0 signals contraction.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.2%.
Regarding economic data expected at Wall Street, economic data was plentiful. Factory orders rose 1.0% in April after declining an upwardly revised 4.7% (from 4.9%) in March. The consensus expected orders to increase 1.6%. Overall, the report was not too different from expectations. Durable goods growth was strong on solid demand from just about every sector. Some of those gains, however, were offset by falling nondurable goods prices.
While the manufacturing industry slipped into a contraction in May, the services sector managed its 41st consecutive monthly expansion. The ISM Non-manufacturing Index improved slightly in May, increasing from 53.1 in April to 53.7. The consensus expected the index to increase to 53.5.
Nonfarm business productivity increased 0.5% in Q1 2012. That was down from an originally reported 0.7% gain and exactly in-line with the consensus. The big surprise was that unit labor costs now show a 4.3% decline in the first quarter after originally reporting a 0.5% increase. The consensus expected unit labor costs to be revised up to 0.6%.
Firms not only stretched their workforce by increasing their hours in the first quarter (1.6%), but they cut their hourly pay by 3.8%. Essentially, firms were able to produce more, pay less, and reap higher profits.
Crude-oil prices ended moderately higher on Wednesday, 05 June 2013 at Nymex. Prices rose following the weekly inventory report from energy department showing more than expected drop in crude stockpiles for last week. Light and sweet crude for July ended higher by $0.43 (0.5%) at $93.74 a barrel on the New York Mercantile Exchange on Wednesday.
In the weekly inventory report, the EIA reported today that U.S. crude-oil supplies fell 6.3 million barrels for the week ended 31 May to 391.3 million barrels. Market was looking for a 1-million barrel decline. Report also showed that gasoline supplies fell by 400,000 barrels, while distillate stockpiles, which include heating oil, rose by 2.6 million barrels. Market was looking for a climb of 1 million barrels in gasoline inventories and a rise of 1.4 million barrels in distillate supplies.
Bullion metal prices ended moderately higher on Wednesday, 05 June 2013. Some weak U.S. economic data pressured the greenback and in turn helped push gold prices a bit north. Traders and investors are more eagerly awaiting major monthly data when the European Central Bank holds its monthly meeting on Thursday, followed by Friday's U.S. employment report.
Gold for August delivery ended higher by $1.3 (0.1%) at $1,398.5 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. July silver ended higher by $0.06 cents (0.3%) at $22.47 an ounce on Wednesday.
For every share rising, four fell on the New York Stock Exchange, where 738 million shares traded. Composite volume approached 3.6 billion.
Indian ADRs ended mostly lower on Wednesday. In the IT space, Infosys was down 2.4% and Wipro was down 1.7%. In the Banking space, HDFC Bank was down 0.9% and ICICI Bank was down 1.7%. In the Telecom space, Tata Communication was down 2.2%. In other space, Tata Motors was down 1.3%, Dr Reddys was down 1.6% and Sterlite was down 1.2%.
For tomorrow, May Challenger Job Cuts will be reported at 7:30 ET while weekly initial claims will be released at 8:30 ET.
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