The U.S. stock market lost some ground on Wednesday after the
fourth-quarter GDP report showed that the economy shrunk by 0.1
percent in the fourth quarter. This compares to consensus
estimates which called for growth of 1 percent.
Volume remains light and investors are primarily focusing on
earnings season. It will be interesting to see if volatility
picks up in coming days after the surprising GDP figure.
Major Averages
The Dow Jones Industrial Average fell 44 points, or 0.32
percent, to close at 13,910.
The S&P 500 lost 6 points, or 0.39 percent, to $1,502.
The Nasdaq Composite shed a little more than 11 points, or
0.36 percent, to 3,142.
Economic Reports
The major economic report on Wednesday was the GDP figure for
the fourth quarter. The economy contracted during the period, for
the first time since Q2 2009. GDP fell 0.1 percent, which was
well below the consenus which called for a rise in GDP of 1%.
The headline figure was not as bad as it looked, however, as
most of the decline was attributable to a fall in government
spending. Key areas such as consumption and fixed investment
actually saw an acceleration in the quarter.
Other reports included the ADP Employment change and the FOMC
rate decision. The ADP job report showed that the economy added
192,000 jobs in January versus consensus estimates of 175,000.
The Federal Reserve held interest rates near zero as
expected.
Commodities
Crude oil was higher on Wednesday with NYMEX crude futures,
the U.S. benchmark, trading up 0.44 percent to $98.00. Brent
crude futures added 0.56 percent to $115.00. Natural gas snapped
a losing streak, climbing 2.39 percent to $3.23.
Precious metals were also higher on the session. COMEX gold
futures were last up 0.87 percent to $1,677. Silver futures had
climbed 2.66 percent and were last trading at $32.02. In the
industrial metals, copper was last up 1.60 percent.
Most of the grains were higher on Wednesday as corn and wheat
both surged better than 1 percent. In soft commodities, orange
juice concentrate contracts were up more than 4 percent. Sugar
was almost 2 percent higher and cocoa and coffee both fell on the
day.
Bonds
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE:
TLT
) fell around 0.15 percent on the day to $116.78.
Bond yields were mostly flat on the day, with the exception of
the 2-Year Note which saw its yield fall one basis point to 0.27
percent.
Currencies
The U.S. dollar was lower on Wednesday along with the stock
market. The PowerShares DB US Dollar Index Bullish ETF (NYSE:
UUP
), which tracks the performance of the greenback versus a basket
of foreign currencies, lost 0.41 percent to $21.64.
The closely watched EUR/USD pair was 0.57 percent higher at
last check to $1.3564. The dollar rose against the Yen, with the
USD/JPY last trading up 0.34 percent.
Among the other significant movers was the AUD/USD which fell
0.45 percent.
Volatility and Volume
The VIX spiked on Wednesday as stocks fell in afternoon trade.
The widely watched volatility index added around 7 percent on the
session to 14.24.
Volume remained low on the day. Only around 101 million SPDR
S&P 500 ETF (NYSE:
SPY
) shares traded hands compared to a 3-month daily average of 137
million.
Stock Movers
Facebook (NASDAQ:
FB
) rose around 1.50 percent ahead of a scheduled earnings report
after the closing bell.
Research in Motion (NASDAQ:
RIMM
) fell 12 percent after releasing its much anticipated
BlackBerry10 line of smartphones.
Freescale Semiconductor (NYSE:
FSL
) surged almost 15 percent after its quarterly earnings
results.
Isis Pharmaceuticals (NASDAQ:
ISIS
) climbed almost 10 percent after the FDA approved a drug
developed by the company called Kynamro.
Meritor (NYSE:
MTOR
) lost almost 13 percent after releasing disappointing earnings
results.
Commvault Systems (NASDAQ:
CVLT
) rose around 9 percent after reporting its fiscal third-quarter
earnings.
Chesapeake Energy (NYSE:
CHK
) jumped more than 6 percent to $20.15 after the company said
that CEO Aubrey McLendon would be stepping down.
Ventrus Biosciences (NASDAQ:
VTUS
) lost almost 23 percent after announcing a share offering.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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