US stocks end mostly higher though Nasdaq slips

Indian ADRs end in a mixed mode

U.S. stocks ended Wednesday's choppy trading session generally higher on 07 May 2014, though selling of shares in Internet companies and high-growth companies resulted in a loss on the Nasdaq Composite. A report ahead of the opening bell showed that slower economic growth caused in part by brutal winter weather led to a sharp decline in U.S. productivity in the first quarter.

The Dow Jones Industrial Average gained 117.52, or 0.7%, to 16,518.54 by the end of the session. The Nasdaq Composite recovered most of the steep losses and finished the day 13.09 points, or 0.3%, lower at 4,067.67. The S&P 500 ended the day at up 10.49 points, or 0.6%, at 1,878.21.

Consumer staples, energy, financials and industrials contributed to the recovery. Technology sector remained the laggard.

The stock market opened the trading day with modest gains amid headlines indicating Russia's President Vladimir Putin has reached out to OSCE chief and Swiss President Didier Burkhalter, attempting to de-escalate the Ukraine crisis through diplomatic avenues. Stock indices, meanwhile, surrendered their opening gains during the first hour of action, but only the Nasdaq Composite spent the remainder of the session in the red, while the Dow and S&P 500 rebounded swiftly.

Markets recovered early morning losses after Federal Reserve Chairwoman Janet Yellen reiterated that the central bank anticipates keeping interest rates very low, even after employment and inflation return to healthy levels. She said the U.S. economy and the economic outlook are generally on the upswing.

The next big economic event for the world market places comes with the European Central Bank monthly monetary policy meeting on Thursday. There is growing pressure on the ECB to implement further monetary policy stimulus measures, amid worries about price deflation in the European Union. The Euro currency is at a multi-week high against the U.S. dollar, and the strength of the common currency is also a concern to many European officials and another reason to EU interest rates.

U.S. economic data released Wednesday included preliminary productivity and costs, the global services PMI, the weekly DOE liquid energy stock report, and consumer installment credit. Nonfarm business labor productivity declined 1.7% in the first quarter after increasing an upwardly revised 2.3% (from 1.8%) in Q4 2013. The consensus expected the reading to decline 1.2%. This was the first decline in productivity since Q1 2013 when it declined 1.8%. With a 0.1% increase in Q1 2014 GDP, there was no doubt that productivity declined during the first quarter. Output levels managed to increase a minimal 0.3% in the first quarter, but that was dwarfed by a 2.0% increase in hours worked. Hours growth had not exceeded 2% since Q4 2012.

Separately, consumer credit increased by $17.50 billion in March, which was higher than the consensus estimate of $16.10 billion. The prior month's credit growth was revised lower to $13.30 billion from $16.50 billion.

Shares of Yahoo fell 6.4% after Chinese Internet heavyweight Alibaba Group Holding Ltd. filed plans to list shares in the U.S. Yahoo has a 24% stake in Alibaba, and its initial public offering is poised to be one of the biggest listings on record.

Whole Foods shares have tumbled 19.3% after the grocer reported disappointing results and issued cautious guidance.

Bullion metals ended 1.5% lower at Comex on Wednesday, 07 May 2014. Gold futures settled below $1,300 an ounce on Wednesday for the first time in nearly a week, as generally upbeat comments from Federal Reserve Chairwoman Janet Yellen on the U.S. economy helped dull safe-haven demand for the metal. Some positive remarks on the U.S. economy from Fed Chair Janet Yellen helped push gold prices solidly lower on Wednesday. A potential de-escalation in the Russia-Ukraine crisis also weighed on the safe-haven metal.

Gold for June delivery fell $19.70, or 1.5%, to settle at $1,288.90 an ounce on the Comex division of the New York Mercantile Exchange. July silver lost 30 cents, or 1.5%, to $19.34 an ounce.

Crude oil futures cleared the $100-a-barrel level on Wednesday, 07 May 2014 to close at their highest level in more than a week after U.S. data showed crude inventories unexpectedly fell back from a record level. Crude oil for June delivery rose $1.27, or 1.3%, to settle at $100.77 a barrel on the New York Mercantile Exchange.

EIA's latest report showed that crude stockpiles fell 1.8 million barrels for the week ended 2 May 2014. Market was looking for a climb of 1.3 million barrels. The EIA also said that gasoline supplies rose by 1.6 million barrels, while distillate stockpiles declined by 400,000 barrels. Gasoline stockpiles were expected to fall by 900,000 barrels, while distillates, which include heating oil, were seen up 1.5 million barrels.

Participation was above average as roughly 750 million shares changed hands at the NYSE.

Indian ADRs ended mixed on Wednesday. In the banking space, ICICI Bank shed 0.41% at $43.81 and HDFC Bank rose 1% at $41.29. In the IT space, Infosys tumbled 3.73% at $51.30 and Wipro slipped 1.95% at $11.54. In the other sectors, Tata Motors jumped 0.98% at $38.12 and Dr Reddy's Laboratories advanced 0.39% at $45.84.

Tomorrow, weekly initial claims (consensus 325,000) will be announced at 8:30 ET.

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