Six out of ten economic sectors ended in the red
U.S. stocks finished little changed on Wednesday, 12 March 2014 after erasing early losses that followed a selloff in Asian and European equities. Stocks began the day in the red, but spent the first two hours of action in a steady climb off their lows. The cautious start took place amid broad-based weakness across major European markets where Germany's DAX, Great Britain's FTSE, and France's CAC all posted losses close to 1.0% apiece.
The Dow Jones Industrial Average dipped 11.24 points, or 0.1%, to close at 16,340.01, slipping for the third day in a row. The Nasdaq Composite gained 16.14 points, or 0.4%, to finish at 4,323.33, halting a four-session losing streak. The S&P 500 ended up 0.57 point, or less than 0.1%, at 1,868.20.
Six out of ten sectors ended in the red. Utilities and technology sectors fared best among the index's 10 sectors.
Traders also attributed the morning selling to worries about China's slowdown and Russia-Ukraine tensions, and they also emphasized a lack of new catalysts.
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The Russian troop occupation of Ukraine is still a serious concern among traders and investors at mid-week. This coming weekend could be pivotal in this geopolitical crisis. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. The Group of Seven nations was set to release a statement on Wednesday to reiterate its solidarity regarding opposing Russia's invasion of Ukraine.
U.S. economic data released Wednesday was again light and did not impact the markets. Economic data was limited to the weekly MBA Mortgage Index, which fell 2.1% to follow last week's increase of 9.4%
In other news on Wednesday, industrial production in the European Union fell by 0.2% in January, from December, and was up 2.1% year-on-year. The decline in EU output was unexpected and could have an influence on the European Central Bank's monetary policy. The ECB has been battling tepid EU economic growth and deflationary concerns with a very stimulative monetary policy.
Bullion prices ended substantially higher on Wednesday, 12 March 2014. Gold prices ended the U.S. day session with solid gains and hit a six-month high as more safe-haven buying and an increasingly bullish posture prompted buying interest. Gold futures rallied on Wednesday to mark their highest settlement since September, buoyed by tensions in Ukraine and a pullback for the equities markets linked to concerns over a slowdown in China's economy.
Gold for April delivery rose another $23.80, or 1.8%, to settle at $1,370.50 an ounce on the Comex division of the New York Mercantile Exchange, its third-straight session climb. May silver jumped 54 cents, or 2.6%, to $21.36 an ounce.
Crude oil futures dropped 2% on Wednesday, 12 March 2014 at Nymex to finish below $98 a barrel following a jump in U.S. crude inventories that was nearly three times more than the market expected and a U.S. government announcement of plans for a test sale of oil from the Strategic Petroleum Reserve. Concerns over the outlook for energy demand also continued to prevail in the wake of soft China data earlier in the week. April crude oil fell $2.04, or 2%, to settle at $97.99 a barrel on the New York Mercantile Exchange.
In its weekly inventory report, the Energy Information Administration said crude stockpiles jumped 6.2 million barrels for the week ended 7 March 2014. Market was looking for a climb of 2.3 million barrels. The report also showed that gasoline supplies fell by 5.2 million barrels, while distillate stockpiles declined by 500,000 barrels. Gasoline stockpiles were expected to fall by 1.8 million barrels, while distillates, which include heating oil, were seen down 900,000 barrels. poll.
Comex copper futures prices hit a nearly four-year low on Wednesday, 12 March 2014. Part of the selling pressure on copper comes from concerns about weakening Chinese economic growth. China is the world's largest copper consumer. Copper is a major industrial metal worldwide. Worries over China have also sent prices for copper sharply lower over the past three trading sessions, with prices holding below $3 a pound.
High-grade copper for May delivery closed up a penny, or 0.3%, at $2.96 a pound on Wednesday. Prices closed nearer the session high on tepid short covering after hitting a fresh contract and nearly four-year low early on. Weak economic data coming from China last weekend has helped to sink the copper market.
Participation was on the light side with 646 million shares changing hands at the NYSE floor.
Indian ADRs ended mixed on Wednesday. In the IT space, Infosys was down 6% at $56 and Wipro shed 0.88% at $13.4. In the banking space, ICICI Bank was up 1.4% at $41.5 and HDFC Bank rose 1% at $37.73. In the other sectors, Tata Motors slipped 1.44% at $33.11 and Dr Reddy's Laboratories rose 0.9% at $44.78.
Tomorrow, weekly initial claims, February retail sales, and February import/export prices will be released at 8:30 ET while January business inventories will cross the wires at 10:00 ET. The day's data will be topped off with the 14:00 ET release of the February Treasury budget, which was originally scheduled for today.
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