Sharechat Logo

While you were sleeping Wall Street, Wal-Mart drop

Thursday 26th September 2013

Text too small?

Wall Street declined amid concern Congress might not make the October 1 deadline for a short-term spending agreement needed to ensure the US government can avert a shutdown.

Treasury Secretary Jack Lew warned Congress that the US would exhaust its borrowing capacity no later than October 17, at which point it would have only about US$30 billion in cash on hand, according to Reuters.

The uncertainty helped fuel demand for a US Treasury auction of US$35 billion in five-year bonds, which drew a higher-than-expected yield of 1.436 percent.

Gold also received a boost, bolstering demand for the metal that is perceived to be a safe haven investment. Gold futures for delivery in December gained 1.5 percent.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.24 percent, the Standard & Poor's 500 Index declined 0.17 percent, and the Nasdaq Composite Index slipped 0.09 percent.

Shares of Wal-Mart dropped, last down 1.8 percent, leading the drop in the Dow.

Wal-Mart told suppliers it is cutting orders this quarter and next to address rising inventories, Bloomberg News reported, citing a September 17 email from an ordering manager at the retailer.

"Wal-Mart's inventory is well above their goal," Poonam Goyal, an analyst at Bloomberg Industries, said. "Most of the inventory increase was because of missed sales."

The latest economic data were mixed. US durable goods orders inched 0.1 percent higher in August, according to Commerce Department data. New orders for core durable goods, which are viewed as a gauge of business spending plans, rose just 1.5 percent in August. That was below economists' expectations, Reuters said, and not enough to make up for the 3.3 percent decline registered in July.

"Companies are still cautious in their capex [capital expenditure] due to the uncertain economic scenario," Annalisa Piazza, an analyst at Newedge Strategy, told Reuters.

Separately, purchases of new homes climbed 7.9 percent in August to an annual rate of 421,000 units, the Commerce Department said.

Americans are losing faith in the nation's economic recovery even as forecasters expect growth to accelerate, according to a Bloomberg National Poll. The results of the September 20-23 poll reflect public impatience with an economy that has grown at an average rate of 2.1 percent since the recession's June 2009 end, a full percentage point below the 50-year average.

In Europe, the Stoxx 600 Index finished the session with a 0.1 percent decline from the previous close. The UK's FTSE 100 fell 0.3 percent. Germany's DAX and France's CAC 40 closed near the same level of the previous day's close.

In Germany, a gauge of consumer confidence compiled by GfK rose to the highest level in six years, exceeding expectations of analysts polled by Reuters and Bloomberg News in separate surveys.

"German consumers are expecting the economy to gain momentum in the next few months," GfK said in a statement. "There is a clear upwards trend."

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:

Hallenstein shares fall as margin squeeze pushes annual earnings near bottom of guidance
Hallenstein annual profit falls 11 percent as Glasson margins come under pressure
Hallenstein forecasts up to 12 percent drop in FY profit after slow start to winter
Hallenstein Glasson lifts 1H profit 15 percent, sales lag as weather stays warm
Hallenstein Glasson 1H profit climbs 15 percent on 'robust' NZ sales
Hallenstein says sales rose 7 percent in first 4 months
Hallenstein says FY profit rose as much as 14% on sales, insurance
Hallenstein Glasson 1H profit rises 27%
Hallenstein Glasson Holdings
Hallenstein Glasson expecting a better first-half

IRG See IRG research reports