February 1, 2013
After weaker GDP data, given worse than expected weekly jobless claims and disappointing corporate earnings, U.S. stocks trimmed earlier gains, sending the Dow 49 points lower, while the S&P lost 0.26 percent.
As is known, fourth quarter GDP contracted 0.1 percent, first shrink since 2009, raising concerns over the recovery. However, investors sold equities yesterday as weekly jobless claims rose to 368000, adding more concern over the economy even though personal income and Chicago PMI showed better horizon. Meanwhile, UPS and Dow Chemical released their quarterly reports, revealing downbeat environment over corporate results.
On the corporate side, Time Warner Cable Inc. plunged 11 percent to $89.34. ConocoPhillips tumbled 5.1 percent, the biggest drop since August 2011. UPS lost 2.4 percent to $79.29. Dow Chemical Co. sank 7 percent on weaker sales.
European stocks retreated for second day as weaker corporate reports and economic data pared gains on the equities despite upbeat employment situation in Germany and encouraging government borrowings. The Stoxx Europe 600 Index fell 0.5 percent to 287.22 at the close.
The common currency continued its longest winning streak in ten years as market confidence came back in the region in the wake of falling interest rates and improving economic data. Moreover, the Fed's ongoing zero rate policy underpinned euro's strength in the wake of resurging risk appetite. The euro climbed to $1.3594, the highest level since Nov. 18, 2011.
Despite weaker dollar, oil for March delivery fell
45 cents, or 0.5%, to $97.49 a barrel on the New York Mercantile Exchange amid speculation downbeat employment situation would hit energy demand.
Gold for April delivery slumped $19.60, or 1.2%, to settle at $1,662 an ounce on the
Comex division of the New York Mercantile Exchange although the dollar weakened further as investors cashed in recent profits.
Today, we will keep eye on motor vehicle sales, PMI manufacturing index, ISM manufacturing index, construction spending, consumer sentiment and all important employment situation in succession.
ikonfinance.com