Indian ADRs witness a mixed finish though
U.S. stocks rebounded on Wednesday, 21 May 2014 from the previous day's losses and ended the session with solid gains. For the most part, the indices was unperturbed by the underperformance of small caps, while also showing little reaction to the FOMC minutes from the April 29-30 meeting.
The Dow Jones Industrial Average gained 158.75 points, or 1%, to 16,533.06, the best%age gain in 5 weeks. The Nasdaq Composite ended the day up 34.65 points, or 0.9%, at 4,131.54. The S&P 500 index closed 15.20 points, or 0.8%, higher at 1,888.03.
All ten sectors posted gains led by consumer discretionary and energy sectors. The financial sector provided leadership through the first half of the session, but energy and consumer discretionary overtook financials during the afternoon.
The economic highlight of the day and arguably of the week was the Wednesday afternoon release of the latest Federal Reserve Open Market Committee (FOMC) minutes. The FOMC members did discuss a rate hike process, and the market place deemed those words just a bit hawkish. Comments from a couple of Fed officials on Tuesday were also seen to be in the hawkish camp on U.S. monetary policy.
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Among stocks under focus, Home-improvement retailer Lowe's on Wednesday reported first-quarter earnings that came in ahead of analyst expectations by one penny a share, but sales missed estimates. Lowe's also lifted its per-share earnings view for 2015. Shares closed down 0.2%.
Moody's Investor Services on Wednesday cut its outlook on China's property sector from stable to negative. The firm said it expects that sector of the Chinese economy to struggle in the next 12 months.
At Wall Street, economic data was limited to the weekly MBA Mortgage Index, which rose 0.9% to follow last week's increase of 3.6%. Despite the headline increase, purchase applications declined 3.0%, while the overall index was driven higher by a 4.0% gain in refinancing applications.
The Russia-Ukraine territorial crisis has not gone away, but there has been no major, fresh news on that front for a couple weeks. The Ukraine holds a presidential election on Sunday, which could produce new tension in the region.
Bullion prices ended lower on Wednesday, 21 May 2014. Gold futures settled at their lowest close in early two weeks, as a climb in U.S. equities lured investors away from the precious metal. Prices fell even further in the electronic trading session immediately after the Federal Open Market Committee released the minutes from its April meeting, but prices have rebounded to trade above the Comex closing level.
Gold for June delivery fell $6.50, or 0.5%, to settle at $1,288.10 an ounce on the Comex division of the New York Mercantile Exchange. July silver dipped 6 cents, or 0.3%, to end $19.34 an ounce for the regular Comex trading session.
Crude oil futures topped $104 a barrel on Wednesday, 21 May 2014 at Nymex to settle at their highest level in a month after a U.S. government report showed a drop in weekly crude inventories that was much bigger than the market expected. In its first full session as a front-month contract, July crude rose $1.74, or 1.7%, to settle at $104.07 a barrel on the New York Mercantile Exchange. Prices were trading around $103.39 before the government supply data were released.
The U.S. Energy Information Administration said early Wednesday that crude stockpiles dropped 7.2 million barrels for the week ended 16 May 2014. The decline was more than 23 times bigger than expected, as market was looking for a more modest decline of 300,000 barrels. The report aslo showed that gasoline supplies rose by 1 million barrels, while distillate stockpiles climbed by 3.4 million barrels. Gasoline stockpiles were expected to rise by 150,000 barrels, while distillates, which include heating oil, were seen down 250,000 barrels.
Indian ADRs were mixed on Wednesday. Among banks, ICICI Bank was up 0.44% to $50.76 per ADR and HDFC Bank advanced 0.64% to $46.88. In the technology space, Infosys rose 0.91% to $53.31 while Wipro fell 0.35% to $11.33. Among others, Tata Motors declined 0.1% to $40.74 and Dr Reddy's Labs slipped 0.64% to $38.67.
Tomorrow, weekly initial claims (consensus 305K) will be released at 8:30 ET, while the Existing Home Sales report for April (consensus 4.66 million) and the April Leading Indicators report (consensus 0.5%) will cross the wires at 10:00 ET.
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