U.S. stocks closed moderately lower on Wednesday, 02 October 2013 paring losses during the trading session as investors looked for a possible thaw in negotiations over the government shutdown after a private-sector jobs report came out weaker than expected.
The Dow Jones Industrial Average which at one point was off by 147 points intraday, closed down 58.56 points, or 0.4%, at 15,133.14. The Nasdaq Composite finished the day down 2.96 points, or l0.1%, at 3,815.02. Earlier in the session, the Nasdaq had been down nearly 30 points. The S&P 500 index declined 1.13 points, or 0.1%, to finish at 1,693.87.
Telecom, health care, and industrials were the worst performing sectors. United Technologies, Coca-Cola and American Express led the Dow laggards.
The marketplace greeted the partial U.S. government shutdown with some increased anxiety on Wednesday but certainly not panic. Asian and European stock markets overnight focused on other matters. There are mixed ideas in the market place regarding how long the U.S. lawmakers will let the government remain closed.
U.S. government reports have been postponed due to the government furloughs, including Friday's monthly employment report. Non-government U.S. economic reports will be issued as scheduled. The ADP national employment report was released at about the time the Comex futures market opened Wednesday morning. It showed a U.S. jobs gain of 166,000 in September, which was slightly less than market expectations.
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Wednesday's European Central Bank meeting resulted in no changes in ECB monetary policy, which supported the Euro currency and added downside pressure to the greenback. The monthly press conference by ECB president Mario Draghi produced no major pronouncements, but Draghi did express concern about the U.S. government shutdown impacting major world economies, if the matter is not resolved soon. There has been some speculation in the market place that the ECB could at some point launch another round of monetary stimulus measures.
The latest German government bond auction Wednesday saw 10-year bund yields drop sharply, as demand for safe-haven German debt increased due to the U.S. government shutdown.
The technology sector was another notable outperformer with top components like Apple, Cisco Systems and Microsoft adding between 0.3% and 1.0%.
Crude Oil futures closed above $104 a barrel on Wednesday, 02 October 2013 rebounding from a three-session decline, after a report that construction of the southern leg of TransCanada's Keystone pipeline will be completed this month, potentially alleviating a glut of oil at nation's delivery hub. Oil also found support from bets that weaker-than-expected growth in U.S. private-sector jobs will prompt the Federal Reserve to delay a potential pullback in its monetary-stimulus program. And traders digested weekly data that showed a climb in U.S. crude and gasoline supplies along with a decline in distillate supplies.
Crude oil for November delivery jumped $2.06, or 2%, to settle at $104.10 a barrel on the New York Mercantile Exchange. It tapped an intraday high of $104.23 on Wednesday.
On Wednesday, the U.S. Energy Information Administration reported that crude stockpiles for the week ended Sept. 27 rose 5.5 million barrels. That's much bigger than the 2.4 million-barrel rise expected by the market. The report also showed that gasoline supplies also rose 3.5 million barrels, while distillate stockpiles were down 1.7 million barrels, the EIA said. Gasoline stockpiles were expected to fall 1.4 million barrels, while forecasts called for a decline of 1.8 million barrels for distillates.
Comex gold prices ended the U.S. day session sharply higher on Wednesday, 02 October 2013 and took back most of Tuesday's heavy losses. The anxiety regarding the U.S. government shutdown and U.S. lawmakers' impasse on agreeing to a federal budget ratcheted up a notch Wednesday, as the partial government closure entered its second day. Gold also found support following disappointing data on U.S. private-sector employment.
December gold rose for the first time in three sessions, lifting from its session high of $1297.30 per ounce. It settled 2.7% higher at $1320.70 per ounce, just below its session high of $1324.20 per ounce. December silver brushed a session high of $22.04 per ounce in late morning floor action and eventually settled with a 3.6% gain at $21.92 per ounce.
Indian ADRs ended mixed on Wednesday. In the IT space, Infosys rose 0.43% at $48.90 and Wipro was up 1.8% at $10.50. In the banking space, HDFC Bank was up 0.2% $31.87 and ICICI Bank was down 0.42% at $31.18. In the other sectors, Tata Motors shed 0.7% at $27.30 and Dr Reddys Laboratories was unchanged at $38.59.
Tomorrow, September Challenger Job Cuts will be released at 7:30 ET; weekly initial claims will be reported at 8:30 ET; and the September ISM Services report will cross the wires at 10:00 ET. The August factory orders report will not be released at its scheduled time due to the government shutdown.
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