US stocks decline halting two session winning streak

Indian ADRs end lower led by ICICI Bank

U.S. stocks ended lower on Tuesday, 10 December 2013 halting a two-session winning streak. With no major economic data on the calendar, investors tracked U.S. budget talks and continued to weigh whether a reduction in bond buying will come at next week's Federal Reserve meeting. Mixed economic reports out of China also provided an uncertain backdrop.

The Dow Jones Industrial Average shed 52.40 points, or 0.3%, to finish at 15,973.13, while the Nasdaq Composite lost 8.26 points, or 0.2%, to 4,060.49. The S&P 500 fell 5.75 points, or 0.3%, to close at 1,802.62.

U.S. equities began the session with modest losses, tracking the performance of their European counterparts. An early bid lifted the Nasdaq and S&P 500 briefly into positive territory, but a second round of selling into the European close pushed the indices back into the red where they spent the remainder of the session.

Traders and investors are looking forward to next week's meeting (December 17-18) of the U.S. Federal Reserve's Open Market Committee (FOMC). Recent upbeat U.S. economic data, including a stronger-than-expected U.S. jobs report last Friday, suggest the Fed might move up its timeline for implementing a tapering of its monthly bond-buying program, also called quantitative easing.

In overnight news, European Central Bank president Mario Draghi said the EU is not headed for a deflationary debacle like that of Japaneven though EU inflation is very low and is expected to remain that way for quite some time. His comments suggest the ECB will keep its very easy money policies for a long time to come.

In today's economic data at Wall Street, wholesale inventories increased 1.4% in October after increasing an upwardly revised 0.5% (from 0.4%) in September. The consensus expected wholesale inventories to increase 0.3%. The increase in inventories followed a sizable gain in overall inventories in the third quarter. It was expected that inventory growth would slow considerably throughout the fourth quarter.

Also, durable inventories increased 0.4% in October. Big gains in autos (2.7%) and furniture (1.3%) offset declines in computer (-5.7%) and professional (-1.4%) equipment. Meanwhile, nondurable inventories increased 3.0% in October, up from a 1.4% September gain. Almost two-thirds of the increase in nondurable goods inventories was the result of a 17.0% increase in farm product inventories.

Bullion prices ended the U.S. day session sharply higher on Tuesday, 10 December 2013. Gold and silver were boosted by short covering and bargain hunting following recent downside pressure. After their recent successes, the gold and silver market bears now appear to be exhausted. The key outside markets were also in a bullish daily posture for the precious metals Tuesday, as the U.S. dollar index was lower and hit a five-week low, while crude oil prices were higher and hit a six-week high.

Gold for February delivery gained $26.90, or 2.2%, to settle at $1,261.10 an ounce on the Comex division of the New York Mercantile Exchange. March silver futures climbed 61 cents, or 3.1%, to $20.32 an ounce.

Crude Oil futures topped $98 a barrel on Tuesday, 10 December 2013 to settle at their highest level in six weeks as traders bet on a second-straight weekly decline in U.S. crude inventories. Adding further support to prices, last month's oil production from the Organization of the Petroleum Exporting Countries dropped reportedly to the lowest level in more than two years.

Crude oil for January delivery climbed by $1.17, or 1.2%, to settle at $98.51 a barrel on the New York Mercantile Exchange.

Indian ADRs declined on Tuesday. In the IT space, Infosys shed 0.22% at $55.07 and Wipro was down 0.17% at $12.01. In the banking space, ICICI Bank declined 3.68% at $38.99 and HDFC Bank fell 0.85% at $36.17. In the other sectors, Tata Motors shed 1.05% at $31.94 and Dr Reddys Laboratories fell 1.23% at $40.10.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET and the November Treasury Budget will cross the wires at 14:00 ET.

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