Report showing increase in U.S. consumer confidence get ignored
US stocks finished with modest losses on Tuesday, 31 July 2012. U.S. stocks fell as traders remained a bit anxious about whether Europe would take bold steps to curb its debt crisis. The same overshadowed a report showing an increase in U.S. consumer confidence. At midday, equities held near their respective session lows. The three indices were essentially unchanged for the majority of the day until selling pressure pushed them lower. Despite a slew of earnings and a full slate of economic data, markets were been unable to make a considerable push in either direction.
For the day, that ended on Tuesday, 31 July 2012, Dow ended lower by 64.33 points or 0.5% to end at 13,008.72. The Nasdaq lost 6.32 points or 0.21% to end at 2,939.52. The S&P 500 lost 5.98 points or 0.43% to end at 1,379.32.
The consumer discretionary and energy sectors were the worst performing sectors today.
Markets were relatively in the same mode as they were yesterday as traders were waiting to see whether the U.S. Federal Reserve and the European Central Bank will announce any measures when they meet this week.
Focus of the market place this week is on the two-day FOMC meeting of the U.S. Federal Reserve, which started on Tuesday and ends early Wednesday afternoon. Also, the European Central Bank's policy meeting and press conference are on Thursday. The Bank of England also meets to discuss its monetary policy, with results on Thursday. Market watchers will be closely scrutinizing these central bank meetings for any fresh clues on the implementation of quantitative easing of monetary policies. Then on Friday comes the all-important U.S. jobs report.
Tuesday's U.S. economic reports included data from the Commerce Department showing consumer purchases slowed in June, while wages rose. The Conference Board said that U.S. consumer confidence in July climbed for the first rise in six months as Americans grew more hopeful about employment prospects in six months.
Personal income increased in June by 0.5%, which is slightly greater than the 0.4% increase that had been widely expected while personal spending was unchanged, instead of increasing by 0.1% as had been broadly anticipated. Core personal consumption expenditures were up 0.2% month over month, in-line with expectations. Additionally, consumer confidence came in at 65.9 on expectations of a 61.0 reading.
A few bright spots today were present in the materials and heavy machinery sectors. United States Steel was one of the day's best performers, up 8%. The company reported a positive earnings surprise along with better-than-expected revenue growth. Engine maker Cummins was 7% higher following an earnings beat combined with a revenue miss. Three weeks ago, the company reduced their second quarter earnings expectations.
Crude prices ended substantially lower on Tuesday, 31 July 2012 at Nymex. Prices dropped as doubts rose regarding as to what steps will Central banks take in both US and Europe to solve their respective problems. Prices also fell as traders wait for energy department's weekly inventory report tomorrow. Light and sweet crude for September delivery fell $1.72 (1.9%) to $88.06 a barrel on the New York Mercantile Exchange on Tuesday. For the month, crude gained 3.6%.
Gold for August delivery ended lower by $9.2 or 0.6%, to end at $1,610.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. On the month, however, gold gained 0.4%. On Tuesday, silver prices for September delivery ended down 12 cents, or 0.4%, to $27.91 an ounce. Silver gained 1.2% in July.
In the currency market on Tuesday, the dollar index, whish weighs the strength of the dollar against a basket of six other currencies, fell by 0.12%.
For every stock advancing roughly three fell on the New York Stock Exchange, where composite volume neared 3.8 billion. Composite volume for Nasdaq-listed shares came close to 1.8 billion.
Indian ADRs ended mixed on Tuesday. Tata Motors lost 0.15%. ICICI Bank and HDFC Bank lost 1.8% and 1.3% respectively. Wipro Technologies lost 0.5% while Infosys gained 0.23%. MTNL gained 0.9%. Dr Reddys lost 1.9%.
For tomorrow, earnings season will dominate the headlines. In addition to tomorrow's results of the FOMC meeting scheduled for 2:15 PM ET, ADP Employment Change will be reported at 8:15 AM ET and will be followed by the ISM Index and construction spending at 10 AM ET.
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