Energy, utilities and health-care stocks led the losses
US stocks ended the Wednesday session on a lower note on 04 February 2015 at Wall Street. Just when U.S. stocks were rebounding, late-day news that the European Central Bank is rejecting Greek bonds as collateral sent stocks south, with the S&P 500 finishing lower on Wednesday.
The Dow Jones Industrial Average climbed more than 110 points, but ended marginally higher, up 6 points at 17,673.02. The Nasdaq Composite switched between small gains and losses but ended the session 11 points, or 0.2%, lower at 4,716.70. The S&P 500 fell 8.52 points, or 0.4%, to 2,041.51, plunging during the last 15 minutes of the session.
Energy, utilities and health-care stocks led the losses, while six of 10 main sectors ended with losses. The Dow's biggest gainer was Walt Disney Company, which jumped 7.6% to hit an intraday high, keeping the index in the green.
The ECB announcement came with a caveat that the counterparty status of Greek banks remains unchanged and they may satisfy their liquidity needs through Emergency Liquidity Assistance. However, the news showed that the negotiations are likely to be tumultuous, which contrasted with the rosy picture painted over the last two days.
The January ADP national employment report Wednesday was reported up 213,000. That number was just a bit less than the 225,000 rise expected. However, the December ADP report was revised up. The market place showed little reaction to the data.
In overnight news, China's central bank eased its monetary policy Wednesday by cutting its reserve requirement ratio for its domestic banks. The stimulus move is the latest in a salvo of central banks' easing of their monetary policies, in efforts to boost economic growth. This news is a bullish underlying factor for the raw commodity sector. China is a major raw commodity importer. China's central bank cut the amount of cash that banks must hold as reserves, the first industry-wide cut since May 2012, to help boost bank lending and combat a growth slowdown.
The European Union got some upbeat economic news Wednesday when retail sales in the Euro zone rose for the third straight month and at the fastest rate in years. December retail sales were up 2.8%, year-on-year. Retail sales in the EU posted a strong finish to 2014. Also, the data firm Markit reported its composite purchasing managers' index (PMI) for the EU was 52.6 in January from 51.4 in December. A reading above 50.0 suggests growth in the sector. Still, the Euro currency was under modest selling pressure Wednesday.
Among other stocks under focus, General Motors surged 5.4% after beating estimates and announcing plans to boost its dividend by 20.0% to $0.36. Elsewhere among Dow members, the top-weighted listing Visa soared 2.0% and helped underpin the price-weighted index, which ended flat. Furthermore, the stock contributed to the relative strength of the technology sector. Other large sector components were mixed with Apple and Microsoft posting gains while Google, IBM and Oracle registered losses.
Bullion prices ended the U.S. day session modestly higher on Wednesday, 04 February 2015 at Comex. Prices got a boost from the Chinese central bank's decision to cut the reserve-requirement ratio for banks in an aim to boost growth.
Gold for April delivery added $4.20, or 0.3%, to settle at $1,264.50 an ounce after falling by more than $16 on Tuesday. March silver rose more than 7 cents, or 0.4%, to end at $17.395 an ounce.
U.S. crude-oil futures marked their first decline in five sessions on Wednesday, 04 February 2015 at Nymex plunging by almost 9% to settle below the $50 mark as the nation's stockpiles climbed more than expected. Light and sweet crude for March delivery slid $4.60, or 8.7%, to settle at $48.45 a barrel on the New York Mercantile Exchange. Oil was trading around $50.90 before the supply data were released.
On Wednesday, the U.S. Energy Information Administration said crude stockpiles rose 6.3 million barrels for the week ended 30 January 2015. Market had forecast a climb of 2.8 million barrels. EIA data also showed gasoline supplies rose by 2.3 million barrels, while distillate stockpiles climbed by 1.8 million barrels. Market was looking for a decline of 800,000 barrels for gasoline stockpiles and a fall of 2.1 million barrels for distillates, which include heating oil.
Treasuries spiked during afternoon action, sending the 10-yr yield lower by three basis points to 1.76%.
Today's participation was well above average with more than a billion shares changing hands at the NYSE floor.
Tomorrow, the Challenger Job Cuts report for January will be released at 7:30 ET while Initial Claims (consensus 290K), December Trade Deficit (consensus $38.00 billion), and Q4 Productivity and Unit Labor Costs data will all be released at 8:30 ET.
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