Mixed economic data do not have much impact on stocks
U.S. stocks on Thursday, 19 December 2013 recovered most earlier losses as investors shrugged off disappointing housing, manufacturing and employment reports, sending the Dow Jones Industrial Average to a record closing. There was plenty of excitement in the stock market on Wednesday following the FOMC decision to taper its asset purchase program. There wasn't much excitement, however, on Thursday, which featured the added news that the Senate passed the two-year budget agreement. After some early gyrations, the major indices held to pretty tight trading ranges throughout the session and ended the day little changed.
The Dow average added 11.11 points, or 0.1% to 16,179.08. It also hit an intraday record of 16,194.72. The S&P 500 index briefly ventured into positive territory but closed 1.05 point off its record close level at 1,809.60. The Nasdaq Composite closed lower, shedding 11.93 points, or 0.3%, to 4,058.13.
Among major stocks under focus, Facebook trimmed earlier losses and closed 0.9% lower after the social network said it plans a public offering of 70 million Class A shares, with 27 million from Facebook itself and the rest from major shareholders, with co-founder Mark Zuckerberg putting up the majority. Oracle rose 5.8% after the tech company's quarterly results beat Wall Street forecasts late Wednesday. Shares of Target fell 2.2% after the company was hit by an extensive credit-card breach over the Black Friday shopping weekend.
Today's economic data didn't move the needle much since it was a mixed bag. Initial claims for the week ending December 14 rose by 10,000 to 379,000 (consensus 333,000). That was the highest level in nine months, but once again seasonal adjustment problems were cited by the Department of Labor as impacting the reporting.
Existing home sales declined 4.3% in November to a seasonally adjusted annual rate of 4.90 mln (consensus 5.00 mln). November marked the first time in 29 months that home sales were below year-ago levels. The Philadelphia Fed Index jumped to 7.0 in December (consensus 5.0) from 6.5, reflecting an expansion in manufacturing activity in the Philly Fed region Leading Indicators increased 0.8% in November (consensus 0.6%) following a downwardly revised 0.1% increase (from 0.2%) in October.
Bullion prices ended substantially lower on Thursday, 19 December 2013 at Comex. Gold futures marked their lowest settlement in more than three years on Thursday as the Federal Reserve's January tapering plans and a rally in the U.S. dollar sank prices below $1,200 an ounce. Strong gains for the dollar on Thursday put pressure on dollar-denominated gold prices.
Gold for February delivery, the most-active contract, tumbled $41.40, or 3.4%, to settle at $1,193.60 an ounce on the Comex division of the New York Mercantile Exchange. Futures prices touched intraday lows under the key $1,200 level for the first time since June and they also suffered their biggest one-day loss since June.
March silver was hit even harder on Thursday, down 87 cents, or 4.4%, to end at $19.19 an ounce.
Crude-oil futures prices closed at their highest since late October, on Thursday, 19 December 2013 after Fed started reducing stimulus a day before. The Fed said on Wednesday that it would taper its monthly purchases of assets from the current rate of $85 billion to $75 billion next month, which markets took as a sign that the economy is improving and energy demand will increase.
January crude oil jumped 97 cents, or 1%, to settle at $98.77 a barrel on Nymex. The January contract expired at the end of the Thursday trading session, which tends to add to volatility.
Indian ADRs ended mostly lower on Thursday. In the banking space, ICICI Bank shed 3.49% at $35.95 and HDFC Bank declined 3.98% at $34.29. In the IT space, Infosys was up 0.62% at $56.55 and Wipro gained 1.51% at $12.14. In the other sectors, Tata Motors was down 0.89% at $30.04 and Dr Reddys Laboratories fell 1.22% at $39.80.
The only item on Friday's economic calendar is the third estimate for third quarter GDP (consensus 3.6%; prior 3.6%), which isn't expected to have any impact given its dated nature.
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