IMF cuts global growth forecast to 3.8% from 4.0%
U.S. stocks ended in the red on Tuesday, 07 October 2014 as investors turned skittish driving major averages to their lowest levels in months. Equity indices were pressured from the start with the early weakness being attributed to a disappointing Industrial Production report from Germany which represented the largest drop in activity in almost six years. The Dow Jones Industrial Average had the worst selling day in more than two months, settling at the lowest levels since mid-August.
The Dow Jones Industrial Average fell 272.5 points, or 1.6%, to 16,719.33. The S&P 500 closed 29.72 points lower, or 1.5%, at 1,935.1. The Nasdaq Composite fell 69.60 points, or 1.6%, to 4,385.20.
The U.S. stock market slid on worries about global growth after the IMF again cut its global growth forecasts for 2014 and 2015.
The U.S. Dollar index was last down 0.2% on Tuesday.
The International Monetary Fund on Tuesday reduced its world economic growth estimate, dropping the annual growth rate to 3.8% from 4% in an earlier forecast and projected a 2015 expansion of 3.8% versus an earlier forecast of 4%. The news is not surprising but did add a bit to the risk aversion seen in the market place on Tuesday.
There was also dour economic news coming out of the European Union Tuesday, as Germany's factory output was down 4% on the month in August, which was well below expectations of a decline of 1.5%. The struggling European Union economy continues to be a major drag on the entire world economic system. The sinking Euro currency is a result of the economic troubles in the EU. Also, the U.S. dollar has garnered much of its recent strength from a flagging Euro currency.
Most of China has been on holiday the past week and Wednesday is the end of the Golden Week holiday. The commodity markets will see increased participation from the Chinese, and look to fresh China economic readings, as the world's second-largest economy gets back to work.
Economic data at Wall Street was limited to job opening and Consumer Credit report. The Job Openings and Labor Turnover Survey for August indicated job opening increased to 4.835 million from 4.605 million. Consumer credit increased by $13.50 billion in August, down from a downwardly revised $21.60 billion (from $26.00 billion) in July, while the consensus expected an increase of $20.00 billion. The highlight of the U.S. data week is Wednesday afternoon's FOMC minutes. Recent months have seen the FOMC minutes move the markets.
Bullion prices ended the U.S. day session modestly higher on Tuesday, 07 AUgust 2014 at Comex. Gold extended gains Tuesday to rise for a second session, bolstered by weak stocks and a softer U.S. dollar. Gold for December delivery climbed $5.10 to settle at $1,212.40 an ounce. December silver edged up a penny to $17.24 an ounce.
Crude-oil futures resumed their slump on Tuesday, 07 October 2014 at Nymex with the global benchmark ending at its lowest level in two years after the International Monetary Fund cut its outlook for global growth.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November fell $1.49, or 1.7%, to close at $88.85.
Today's participation was ahead of average with more than 770 million shares changing hands at the NYSE.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, while the minutes from the 17 September FOMC meeting will be released at 14:00 ET.
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