U.S. stocks ended Wednesday’s session on a moderately negative note, as traders cashed in some of the recent strength in the markets. The major averages opened slightly lower, but staged a modest, short-lived recovery in early trading. Subsequently, the averages declined steadily throughout the morning before moving roughly sideways to close lower.
While the Dow Industrials receded 21.72 points or 0.20% to end at 10,739, the Nasdaq Composite Index fell 14.80 points or 0.63% to close at 2,335 and the S&P 500 Index ended 5.50 points or 0.48% lower at 1,234.
Eighteen of the Dow components closed lower, with Travelers Co. (TRV), Microsoft (MSFT), JP Morgan Chase (JPM), Disney (DIS) and Bank of America (BAC) receding sharply in the session. On the other hand, Alcoa (AA) rallied 4.74%.
Among the sector indexes, the KBW Bank Index fell 1.84%, the NYSE Arca Securities Broker/Dealer Index receded 1.70%, the Philadelphia Semiconductor Index moved down 1.44%, the NYSE Arca Disk Drive Index declined 1.93%, the NYSE Arca Software Index fell 2.50% and the Philadelphia Housing Sector Index slipped 1.39%
Currency, Commodity Markets
Crude oil futures are edging $0.06 to $74.65 a barrel after declining $0.26 to $74.71 a barrel on Wednesday. Gold futures, which rallied $17.80 to $1,292.10 in the previous session, are rising $17.80 to $1,292.10 an ounce.
In the currency market, the U.S. dollar is trading at 84.574 yen compared to the 84.4952 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is trading at $1.3394 compared to yesterday’s $1.3406.
Asia
The major Asian markets ended Thursday’s session mostly lower, although most key markets including the Chinese, Hong Kong, Japanese and South Korean markets remained closed for a public holiday.
Australia’s All Ordinaries, which languished below the unchanged line in the morning, broke above the unchanged line in the afternoon. Thereafter, the index remained modestly higher amid some volatility to close up 5.30 points or 0.11% at 4,680. Healthcare and material stocks advanced strongly, while consumer discretionary, energy, industrial and utility stocks lost ground in the session.
Europe
After opening higher, the major European markets declined steadily, dropping sharply in late morning trading. The averages are currently languishing in the red, with the French CAC 40 Index and the German DAX Index declining 1.09% and 0.86%, respectively, while the U.K.’s FTSE 100 Index is receding 0.88%. The markets in the region declined in each of the past two sessions.
In economic news, French manufacturing confidence improved slightly in September, a key monthly survey showed, with industry leaders turning positive about future growth. Meanwhile, a separate report showed that France's private sector growth remained strong in September, despite slowing to a six-month low.
Statistical office INSEE’s sentiment indicator rose to 98 from July's 97 in August, matching analysts' expectations. While, manufacturers' personal production outlook indicator climbed to 0 from –11, the general production indicator, which is a gauge of general industrial activity in France, rose to 3 from -1.
The results of a separate survey released by Markit showed that French private sector growth remained strong in September. The composite purchasing managers' index fell 1 point in August, although remaining elevated at 58.5, in August.
At the same time, eurozone private sector activity growth slowed more than expected in September, pointing towards a slowdown in economic growth in the third quarter. The Markit Flash eurozone composite output index fell to a seven-month low of 53.8 from 56.2 in August. This marks the biggest drop since November 2008. Economists had forecast a score of 55.7.
U.S. Economic Reports
Following some recent positive signs of the employment front, first-time claims for unemployment benefits unexpectedly showed a modest increase in the week ended September 18th, according to a report released by the Labor Department.
The report showed that initial jobless claims edged up to 465,000 from the previous week's revised figured of 453,000. Economists had expected jobless claims to come in unchanged compared to the 450,000 originally reported for the previous week.
The National Association of Realtors is scheduled to release its report on existing home sales for August at 10 AM ET. Economists estimate existing home sales of 4.10 million for the month.
Existing home sales slumped 27.2% month-over-month to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million unit-rate in June. Economists expected a less severe decline to 4.72 million units. Inventories measured in months of supply rose to 12.5 months from 8.9 months in June. The median price of an existing home fell 0.2% month-over-month.
The Conference Board is also scheduled to release a report on its U.S. leading index for August at 10 AM ET. The consensus estimate calls for a 0.1% increase in the leading indicators index for the month.
In July, the leading indicators index rose 0.1% month-over-month, with the increase coming about due to the steep yield curve, a lengthier workweek and a decline in claims. The coincident index and the lagging index also increased, rising by 0.2% and 0.4%, respectively.
Chicago Federal Reserve Bank President Charles Evans is scheduled to open a two-day International Banking Conference in Chicago at 10:40 AM ET. Additionally, Paul Volcker, the Chair of the President's Economic Recovery Advisory Board, is due to speak to the two-day International Banking Conference sponsored by the Chicago Federal Reserve Bank and the IMF at 1 PM ET.
Stocks in Focus
Baldor Electric (BEZ) may gain ground after Standard & Poor’s announced that the company will replace Valeant Pharma (VRX) in the S&P MidCap 400 Index. Meanwhile, Universal Health Realty (UHT) will replace Baldor Electric in the S&P SmallCap 600 Index.
Copart (CPRT) could be in focus after it announced that its fourth quarter income from continuing operations rose to 43 cents per share from 41 cents per share last year. Revenues rose 3.3% to %190.5 million. Analysts estimated earnings of 48 cents per share on revenues of $202.7 million.
Red Hat (RHT) is likely to see some activity after it reported that its second quarter non-GAAP net income fell to 19 cents per share from 20 cents per share in the year-ago period. Revenues rose 20% year-over-year to $219.8 million. The consensus estimates called for earnings of 18 cents per share on revenues of $212 million.
Bed Bath & Beyond (BBBY) may also be in focus after it reported that its second quarter earnings rose to 70 cents per share from the year-ago’s 52 cents per share. Net sales climbed 11.6% to $2.14 billion. Analysts estimated earnings of 63 cents per share on revenues of $2.1 billion. For the third quarter, the company expects earnings of 61-65 cents per share, while analysts estimate earnings of 63 cents per share.
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