Investors find little solace in mixed bag of economic reports
U.S. stocks finished Tuesday's choppy trading session lower as investors found little solace in mixed bag of economic reports on housing, manufacturing and consumer confidence. Tuesday, 30 September 2014 marked the end of the month and the third quarter, and investors struggled to find their footing as a mix of economic data during the trading day appeared to offer no clear direction for stocks.
The Dow Jones Industrial Average dropped 28.23 points, or 0.2%, to 17,042.90. The Nasdaq Composite lost 12.46 points, or 0.3%, to 4,493.39. The S&P 500 closed down 5.5 points, or 0.3%, at 1,972.29.
The benchmark index displayed modest strength in the early going with help from influential sectors like technology, financials and industrials sectors. The three cyclical groups helped the S&P 500 climb to a late morning but the index spent the next two hours in a steady retreat.
Economic data included Chicago PMI, Consumer Confidence, and the Case-Shiller 20-City Index today at Wall Street. The Chicago PMI fell to 60.5 in September from 64.3 in August, while the consensus expected a decline to 61.5. Even though the PMI dropped more than expected, the current reading is far from a disappointment. Levels have remained above 60 for five of the past six months, and readings above 60 are generally considered too strong for long-term stability.
The Conference Board's Consumer Confidence Index dropped to 86.0 in September from an upwardly revised 93.4 (from 92.4), while the consensus expected a fall to 92.0. This was the lowest reading in the Consumer Confidence Index since May. The Case-Shiller 20-city Home Price Index for July rose 8.1%, while a 7.4% increase had been expected by the consensus. The reading followed June's increase of 8.1%.
The dollar index which measures the greenback's strength against six rival currencies, climbed 0.4% to 85.93. The U.S. dollar hit another six-year high against the Japanese Yen and a 22-month high against the Euro on Tuesday. Ideas the U.S. Federal Reserve will begin to tighten its monetary policy, while other major central banks do the opposite, have boosted the dollar and pressured the Euro currency and other major currencies. The appreciation of the greenback has been a major theme in the market place in recent weeksto the detriment of the raw commodity sector.
The market place continues to closely monitor a big but so far non-violent pro-democracy demonstration occurring in Hong Kong. Any escalation or violence in the Hong Kong protesting could quickly see keen risk aversion enter the market place. China is celebrating a week-long national holiday this week. Asian stock markets were pressured on the Hong Kong protesting and the uncertainty surrounding the matter.
In other China news, reports said the Chinese central bank eased lending rules so that its domestic banks could make more consumer home mortgage loans and prop up the flagging housing sector.
In Europe, the annual inflation rate in the European Union fell to a five-year low in September, with the annual consumer price inflation rate coming in at up 0.3%. That's down from a 0.4% rate in August. That data further bolsters notions the European Central Bank will continue to promote a very easy monetary policy. The ECB holds its monthly meeting Thursday.
Meanwhile, HSBC's China Manufacturing PMI was unchanged at a final reading of 50.2 in September from August, indicating sluggish growth in the world's second-largest economy.
Large cap components displayed strength with Apple, Cisco Systems and Visa climbed between 0.6% and 1.2%.
Treasuries registered losses after spending the entire session in the red. The 10-yr note fell seven ticks to send its yield higher by three basis points to 2.50%.
Today's participation was ahead of average with more than 910 million shares changing hands at the NYSE floor.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, while ADP Employment Change for September (consensus 202K) will be released at 8:15 ET. The day's data will be topped off with the 10:00 ET release of the ISM Index for September (consensus 58.5) and the Construction Spending report for August (consensus 0.4%).
Powered by Capital Market - Live News
