US stocks linger in the red

Indian ADRs end strictly lower led by Tata Motors

U.S. stocks dropped on Wednesday, 11 December 2013 suffering their worst losses in more than a month, as investors digested the Washington budget deal that could give the Federal Reserve another reason to scale back its bond-buying program soon. There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking.

The Dow Jones Industrial Average shed 129.60 points, or 0.8%, to finish at 15,843.53. The Nasdaq Composite slid 56.68 points, or 1.4%, to end at 4,003.81. The S&P 500 fell 20.40 points, or 1.1%, to close 1,782.22.

Nine out of ten sectors ended lower led by financial sector. Top-weighted financial and health care sectors trailed throughout the session. Consumer staples was the sole gainer. Twenty five out of thirty Dow components ended in the red.

Visa was the only listing that added more than 1.0%. Other advancers included Coca-Cola and Procter & Gamble while the broader consumer staples sector eked out a gain.

Among major stocks under focus, MasterCard jumped 3.5% after the credit-card giant's board approved a stock split and authorized a new stock buyback program late Tuesday.

Among news of note, negotiators in Washington secured a two-year budget agreement that aims to reduce sequester cuts by $63 billion and lower the deficit by roughly $20 billion. The deal has yet to receive full Congressional approval with votes in the House and the Senate expected to take place next week.

Among economic report expected for the day, the weekly MBA Mortgage Index ticked up 1.0% following last week's 12.8% fall. Separately, the Treasury budget deficit declined to $135.20 billion in November from $172.10 billion in November 2012. Since the data are not seasonally adjusted, the November deficit cannot be compared to the decline in October. The consensus expected the budget deficit to fall to $140.00 billion.

In commodities, January crude oil slipped further into negative territory today on higher-than-anticipated builds in gasoline and distillate inventories. The energy component pulled back from its session high of $98.43 per barrel set moments after pit trade opened and brushed a session low of $97.20 per barrel. It settled with a 1.1% loss at $97.47 per barrel.

Although the EIA reported that crude oil inventories had a draw of 10.6 million barrels when consensus called for a draw of 2.7-3.0 million, gasoline stockpiles rose 6.7 million vs expectations for a build of 1.7-2.0 million barrels. Distillate inventories rose 4.5 million barrels when consensus called for a smaller build of 1.5-1.6 million.

February gold spent most of today's floor trade chopping around in negative territory. It dipped to a session low of $1254.60 per ounce in morning action and eventually settled 0.3% lower at $1256.80 per ounce. March silver rose to a session high of $20.48 per ounce moments before equity markets opened but lost steam as the session progressed. It erased most of the earlier gains and closed just 0.1% higher at $20.35 per ounce.

Indian ADRs ended lower on Wednesday. In the IT space, Infosys declined 1.42% at $54.29 and Wipro shed 1.17% at $11.87. In the banking space, ICICI Bank was down 1.72% at $38.32 and HDFC Bank fell 1.35% at $35.68. In the other sectors, Tata Motors slipped 6.2% at $29.96 and Dr Reddys Laboratories shed 1.7% at $39.42.

Tomorrow, weekly initial claims, November Retail Sales, and November export prices ex-agriculture and import prices ex-oil will all be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of the October Business Inventories report.

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