Benchmarks ended mixed on Wednesday following World Bank's
downgrade of global growth estimates, which was partly
overshadowed by strong earnings from two big banks. The Dow
Jones' five run of gains came to an end. Meanwhile, the Consumer
Price Index remained unchanged in December whereas industrial
production surged slightly. The energy sector was the biggest
gainer among the S&P 500 industry groups whereas materials
sector emerged as the major loser.
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The Dow Jones Industrial Average (DJI) lost 0.2% to close the day
at 13,511.23. The Standard & Poor 500 (S&P 500) added
0.02% to finish yesterday's trading session at 1,472.63. The
tech-laden Nasdaq Composite Index gained 0.2% to end at
3,117.54.The fear-gauge CBOE Volatility Index (VIX) lost 1.0% to
settle at 13.42. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 5.6
billion shares, significantly lower than 2012's daily average of
6.45 billion shares. Declining stocks outpaced advancers on the
NYSE; as for 52% stocks that fell, 44% moved higher.
Goldman Sachs Group, Inc. (NYSE:
) and JPMorgan Chase & Co. (NYSE:
) reported their quarterly results on Wednesday. Shares of
Goldman Sachs jumped 4.1% to its highest level since May 2011
after the company reported better-than-expected earnings.
Earnings nearly tripled in the fourth quarter boosted by strong
growth in its investment banking business. JPMorgan earnings also
came in above the Street's estimates. The company's net income
increased 53% in the fourth quarter.
The World Bank reduced global growth estimates because of slow
improvement in developed nations. It reduced its global growth
rate forecast for 2013 to 2.4% from previous estimates of
3.0%. The World Bank also estimates that U.S growth will
decrease by 0.5% in 2013. According to the World Bank: "Overall,
the global economic environment remains fragile and prone to
further disappointment, although the balance of risks is now less
skewed to the downside than it has been in recent years."
Meanwhile, a report from the U.S. Bureau of Labor Statistics
revealed that the Consumer Price Index for All Urban Consumers
(CPI-U) was unchanged in December. The gasoline index dropped in
December for the third consecutive month. CPI surged 1.7% in 2012
following a 3.0% increase in 2011. The energy index surged 0.5%
in 2012 whereas food index increased 1.8%.
Additionally, industrial production gained 0.3% in December
following an increase of 1.0% in November. This was in line with
consensus estimates of 0.3%. In the fourth-quarter, overall
industrial production increased 1.0% annually. Manufacturing
activity increased 0.8% in December after gaining 1.3% in
The Federal Reserve released its latest Beige Book on January 16
which noted that economic activity in the U.S. increased at a
moderate pace in December and the early part of January.
According to the report, "Economic activity has expanded since
the previous Beige Book report, with all 12 districts
characterizing the pace of growth as either modest or moderate."
Consumer spending increased in all twelve districts.
The energy sector was the biggest gainer among the S&P 500
industry groups and the Energy Select Sector SPDR (XLE) gained
0.5%. Stocks such as Chevron Corporation (NYSE:
), Marathon Oil Corporation (NYSE:
), Hess Corp. (NYSE:
), Devon Energy Corporation (NYSE:
) and Apache Corporation (NYSE:
) gained 0.5%, 1.2%, 0.6%, 0.4% and 0.5%, respectively.
The materials sector was the major loser among the S&P 500
industry groups and the Materials Select Sector SPDR (XLB) lost
0.7%. Stocks such as E I Du Pont De Nemours And Co (NYSE:
), FMC Corporation (NYSE:
), PPG Industries, Inc. (NYSE:
), Cabot Corp (NYSE:
) and The Dow Chemical Company (NYSE:
) slipped 0.6%, 0.5%, 0.7%, 1.4% and 1.3%, respectively.