Sharechat Logo

While you were sleeping Solid factory, jobless data

Friday 3rd January 2014

Text too small?

Wall Street fell in the first trading session of 2014, even as US manufacturing and jobless claims provided further evidence of an accelerating recovery in the world's largest economy.

The US Institute for Supply Management's manufacturing index edged lower in December, down to 57 from 57.3 in November, its highest level in more than two years.

Separately, initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 339,000, according to Labor Department data.

"Jobless claims remain at a level consistent with improving labour market conditions," Laura Rosner, a US economist at BNP Paribas in New York, told Reuters.

The data did little to help Wall Street. In afternoon trading in New York today, the Dow Jones Industrial Average dropped 0.81 percent, while the Standard & Poor's 500 Index fell 0.86 percent and the Nasdaq Composite Index shed 0.88 percent.

Declines in shares of Cisco Systems, last down 2.1 percent, and General Electric, last 1.9 percent weaker, led losses in the Dow.

Shares of Apple fell, last down 1.3 percent to US$553.69, after Wells Fargo & Co downgraded its rating on the stock to market perform from outperform.

Meanwhile, Tobias Levkovich, Citigroup's chief US equity strategist, lifted his year-end 2014 target for the S&P 500 to 1,975 from 1,900, Reuters reported, citing a note to clients.

US Treasuries rose, pushing 10-year bond yields four basis points lower to 2.99 percent.

"The only thing that could cause a paradigm shift in expectations for the economy would be a disastrous employment report next Friday," Ian Lyngen, a government-bond strategist at CRT Capital Group in Stamford, Connecticut, told Bloomberg News.

"Between ISM, the fact that there's no data tomorrow and the looming blizzard, any drama in the Treasury market will not occur this week."

The US northeast is preparing for a major winter storm.

Investors will closely watch a speech by Federal Reserve Chairman Ben Bernanke on Friday in Philadelphia for potential clues about the central bank's plans for further easing its monthly bond-buying program. The Fed last month said it will cut its monthly pace of bond purchases to US$75 billion in January, from US$85 billion.

In Europe, solid manufacturing data also failed to lift equities. The Stoxx 600 Index finished the session with a 0.7 percent slide from the previous close. The UK's FTSE 100 fell 0.5 percent, while both France's CAC 40 and Germany's DAX sank 1.6 percent.

Manufacturing in the euro zone rose to a 52.7 reading in December, up from 51.6 in November. It was the fastest pace of growth since May 2011.

"The latest improvement in overall operating conditions was underpinned by solid and accelerated growth in the Netherlands, Germany, Ireland and Italy," Markit said in a statement.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report