The financial sector led the rout in U.S. stocks on Wednesday
U.S. stocks sold off amid the largest volume in nearly three years on Wednesday, 15 October 2014 at Wall Street. Investors jettisoned risky securities and scrambled for the safety of government bonds. The financial sector led the rout in U.S. stocks on Wednesday, as investors grew concerned about a range of issues from the economy to inflation to the current Ebola outbreak. Disappointing economic reports added to already jittery sentiment on Wall Street. Reports on manufacturing in the state of New York and U.S. wholesale prices missed expectations, and a reading on retail sales showed a decline for the first time in eight months.
The Dow Jones Industrial Average fell as much as 460 points, but finished down 173.45 points, or 1.1%, to 16,141.74. The Nasdaq Composite fell more than 10% from its previous peak, but regained its footing, finishing with modest losses. The tech-heavy index closed down 11.85 points, or 0.3%, to 4,215.32. The S&P 500 briefly turned negative for the year before rebounding. The benchmark index closed down 15.21 points, or 0.8%, to 1,862.49.
Eight out of ten sectors ended lower led by financial sector.
10-year Treasurys surged and yields briefly dipped below 2% today, until settling at a 52-week low. Treasuries may have also received a boost from comments made by The Wall Street Journal's Jon Hilsenrath, who said the recent drop in commodity prices gives the fed more room to delay its first rate hike.
Economic data at Wall Street included Retail Sales, PPI, Empire Manufacturing, Business Inventories, and the MBA Mortgage Index. Retail sales declined 0.3% in September following an unrevised 0.6% gain in August, while the consensus expected a downtick of 0.2%. Motor vehicle sales declined 0.8% after increasing 1.9% in July, which was in-line with the decline in per unit sales reported by the motor vehicle manufacturers. Excluding autos, retail sales declined 0.2% in September after increasing an unrevised 0.3% in August, while the consensus expected an increase of 0.3%.
Producer prices fell 0.1% in September after reporting no change in August, while the consensus expected an increase of 0.1%. As expected, energy prices fell 0.7% in September, which was the third consecutive monthly decline. Food prices fell for the second consecutive month and the fourth time in the last five months, dropping 0.7% after falling 0.5% in August. Excluding food and energy, core PPI was flat after increasing 0.1% in August, while the consensus expected an increase of 0.1%.
The Empire Manufacturing Survey for October fell to 6.2 from 27.5, while the consensus expected a downtick to 20.4. Also, Business inventories increased 0.2% in August after increasing an unrevised 0.4% in July, while the consensus expected an increase of 0.4%. The weekly MBA Mortgage Index rose 5.6% to follow last week's 3.8% increase.
Among stocks under focus, Bank of America reported a third-quarter loss that was smaller than expected. Shares fell 4.6%. J.P. Morgan Chase & Co. was the biggest loser in the Dow Jones Industrial Average falling 4.2%.
Wal-Mart fell 3.6% after lowering its fiscal-year 2015 guidance to reflect expected sales growth of 2-3% (3-5% previous).
Bullion prices extended gains for a third session on Wednesday, 15 October 2014 after weak U.S. economic data hammered stocks and sent investors toward safety plays. Three major U.S. economic reports on Wednesday morning were all softer than forecast, sending gold to a nearly five-week high as equities, the U.S. dollar and Treasury yields sagged.
Gold for December delivery climbed $10.50, or 0.9%, to $1,244.80 an ounce at Comex. Before the soft data, the contract had been showing a decline. December silver rose 6 cents, or 0.4%, to $17.46 an ounce.
Crude oil futures ended at fresh multi-year lows on Wednesday, 15 October 2014 at Nymex edging lower amid a broad U.S. equity market selloff that sent investors to the perceived safety of government bonds.
Light, sweet crude futures for delivery in November declined six cents, or 0.1%, to settle at $81.78 a barrel. That was New York-traded oil's lowest settlement since June 2012. Prices have tumbled 4.7% over the last three sessions.
Today's wild ride invited above average participation with more than 1.1 billion shares changing hands at the NYSE floor.
Tomorrow, weekly Initial Claims (consensus 290K) will be released at 8:30 ET, while September Industrial Production (consensus 0.4%) and Capacity Utilization (expected 79.0%) will both be reported at 9:15 ET. Also of note, the Philadelphia Fed Survey for October (consensus 19.8) and the October NAHB Housing Market Index (expected 59) will both be reported at 10:00 ET
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