Benchmarks ended lower on Thursday after investors were
hesitant to take any positions ahead of the Federal Reserve's
policy meeting next week. This marked the end of the seven
consecutive days of gains for the S&P 500. Despite the
ongoing tensions between the U.S. and Syria, stocks had a good
run on the back of encouraging domestic and international
economic reports. Meanwhile, the number of Americans filing for
unemployment benefits declined to its lowest level in more than 7
years. On the international front, Euro Zone's industrial
production declined more than expected in the month of July. The
materials sector was the biggest loser among the S&P 500
industry groups. Technology stocks ended marginally higher.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) lost 0.2% to close the day
at 15,300.64 The S&P 500 slipped 0.3% to finish yesterday's
trading session at 1683.42. The tech-laden Nasdaq Composite Index
decreased 0.2% to end at 3715.97. The fear-gauge CBOE Volatility
Index (VIX) climbed 3.4% to settle at 14.29. Consolidated volumes
on the New York Stock Exchange, American Stock Exchange and
Nasdaq were roughly 6.5 billion shares, above 2013's average of
6.24 billion shares. Declining stocks outnumbered the advancers.
For 32% shares that declined, only 65% advanced.
All eyes will be fixed on the outcome of the Federal Reserve's
next week policy meeting. Policy makers will closely monitor
recent domestic reports. Except August non-farm payroll numbers,
most of the other domestic reports in recent days has been fairly
good. Markets expectations about the Fed trimming its bond buying
program has increased.
Meanwhile, U.S. Secretary of State John Kerry and Russian Foreign
Minister Sergei Lavrov met in Geneva to discuss the ongoing
crisis in Syria. Kerry said before the two-day meeting that he
expects that diplomacy can prevent a military attack on Syria. He
further added: "President Obama has made clear that should
diplomacy fail, force might be necessary to deter and degrade
Assad's capacity to deliver these weapons."
On the domestic front, the U.S. Department of Labor released
initial claims numbers. According to the report, initial claims
dropped 31,000 to 292,000 from the prior week's unrevised figure
of 323,000. This was considerably below the consensus estimate of
330,000. Sharp decline in the initial claims was mostly due to
processing problems. Two states reportedly had problems
processing initial claims numbers, so were not added to the final
figure. The four week moving average declined 7,500 to 321,250
from the earlier week's revised figure of 328,750.
On the international front, Euro Zone's industrial production
declined well below what economists had expected. According to
the EU's statistics office Eurostat, industrial production
declined 1.5% in the month of July. Economists had expected
industrial production to rise 0.1%. Germany's industrial
production declined 2.3% in July from the previous month.
The material sector was the biggest loser among the S&P 500
industry groups and the Materials Select Sector SPDR (XLB) lost
1.0%. Stocks such as E I Du Pont De Nemours And Co (NYSE:
), LyondellBasell Industries NV (NYSE:
), Air Products & Chemicals, Inc. (NYSE:
), The Dow Chemical Company (NYSE:
) and FMC Corp (NYSE:
) slipped 1.3%, 0.8%, 0.5%, 2.5% and 0.2%, respectively.
The technology sector was the biggest gainer among the S&P
500 industry groups and the Technology SPDR (XLK) gained 0.1%.
Stocks such as Apple Inc. (NASDAQ:
), International Business Machines Corp. (NYSE:
), Super Micro Computer, Inc. (NASDAQ:
), Cray Inc. (NASDAQ:
) and Nokia Corporation (ADR) (NYSE:
) added 1.1%, 0.02%, 0.8%, 1.3% and 6.9%, respectively.