Benchmarks finished mixed during yesterday’s trading session as uncertainty looms over Federal Reserve’s decision to tape the bond purchase program. Investor concerns over a possible Government shutdown also added to investor woes. A couple of mixed economic reports were also released yesterday which failed to create optimism among investors. On the international front, the barometer measuring Germany’s business sentiment increased, but just. Of the top ten S&P 500 industry groups, industrial stocks gained the most. However, financial stocks suffered maximum losses.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (:DJI) lost 0.4% to close the day at 15,334.59 The S&P 500 decreased 0.3% to finish yesterday’s trading session at 1,697.42. The tech-laden Nasdaq Composite Index inched up 0.1% to end at 3,768.25. The fear-gauge CBOE Volatility Index (:VIX) decreased 1.6% to settle at 14.08. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6 billion shares, below 2013’s average of 6.24 billion shares. Advancing stocks outnumbered the decliners. For 52% shares that advanced, 44% declined.
The Dow Jones and S&P 500 extended losses for the fourth consecutive trading day as uncertainty prevails over when the Federal Reserve will reduce bond purchases. In the process, the S&P 500 has also erased 1.2% of the profits garnered last week. Last week, investors were surprised by the Fed’s decision of not changing the level of bond purchases. Since then, many policy makers have provided statements and opinions which have made investors even more wary. Additionally, scepticism has seeped through investor sentiment over a possible US government shutdown on October 1.
On an encouraging front, price of single-family home prices witnessed tepid growth for the month of July. Despite slow growth, profits on a year over year basis are the highest in nearly seven years. On a seasonally adjusted basis, the S&P/ Case Shiller composite index for the 20-city composite increased by 0.6% compared to the Street’s expectation of 0.8%. This is also below June’s reading of 0.9%. However, on an unadjusted basis, the increase was 1.8%. Increases in prices have been witnessed in all 20 cities. Among the lot, home prices in Las Vegas witnessed a surge of 27.5% while a 24.8% gain was witnessed in San Francisco.
The Conference Board Consumer Confidence Index for the month of September came in at 79.7 compared to previous month’s reading of 81.8. This was also below the consensus estimate of 80.4. The Present Situation increased to 73.2 from August’s reading of 70.9. However, the expectations Index fell to 84.1 from previous month’s reading of 89.0.
On the international front, the gauge measuring German business sentiment for September improved but fell short of estimates. The business sentiment index came in at 107.7 compared to 107.6 in August. However, it is lower than the estimated level of 108.2. All the business sectors, including the manufacturing and retail sectors have provided mixed readings. This data comes in just a day after France showed significant improvement in the business sentiment index. Germany and France were largely responsible for pulling the Euro Zone region out of a prolonged recession.
Industrials stocks gained the most among the top ten S&P 500 industry groups. The Industrials SPDR ( XLI) gained 0.4%. Stocks such as General Electric Company (NYSE:GE), United Technologies Corporation (NYSE:UTX), Honeywell International Inc. (NYSE:HON), Caterpillar Inc. (NYSE:CAT) and Cummins Inc. (NYSE:CMI) gained 0.2%, 0.5%, 0.1%, 0.1% and 0.2%, respectively.
Financials stocks suffered maximum losses for the second consecutive day. The Financials SPDR ( XLF) lost 0.6%. Stocks such as Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), Citigroup Inc (NYSE:C) and PNC Financial Services Group Inc (NYSE:PNC) lost 0.4%, 2.2%, 1.4%, 1.2% and 0.3%, respectively.
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