Stocks are being dragged lower with the Dow Jones Industrial Average off by more than 160 points as the fallout from Deutsche Bank ( DB ) continues to reverberate through Wall Street.
A headline from Bloomberg claiming hedge funds that clear derivative trades with Deutsche Bank are reducing their exposure to the German bank, sending financial stocks reeling. As a result, all but one of the S&P 500 sectors are in the red, while Dow decliners outnumber advancers by five to one.
The markets were already weighed down by hawkish remarks made by Federal Reserve governors and recent economic data that offers the Fed's breathing room to raise rates. Technical resistance at the S&P 500's 50-day moving average was also causing stocks to flounder as traders reversed Wednesday's gains tied to a rally in oil
The rundown of Thursday's heavy economic calendar includes a stronger-than-expected upward revision to second quarter gross domestic product (GDP) to 1.4% from the prior revision to 1.1%, a below-consensus 3,000 increase in weekly unemployment claims to 254,000, and 1.9% decline in Q2 corporate profits. Also, the U.S. trade deficit in goods narrowed to $58.4 billion, and pending home sales were down 2.4%, missing estimates for a gain of 0.5%.
Pertaining to the outlook for monetary policy, voices are starting to grow louder within the Fed, calling for higher rates as both Kansas City Fed President Esther George and Atlanta Fed President Dennis Lockhart said today that economic data warrants a removal of monetary accommodation. Esther George was one of three Fed members who dissented at the September Federal Open Market Committee meeting -- the only two being Boston Fed President Eric Rosengren and Cleveland Fed President Loretta Mester. Lockhart is a non-voting member this year.
European indices were mostly higher as Wednesday's U.S. rally triggered by proposed production cuts among the Organization of Petroleum Exporting Countries permeated overseas markets. Germany's DAX, however, was the one exception as the selloff in Deutsche Bank spills across German equities.
Crude oil was up $0.88 to $47.91 per barrel. Natural gas was down $0.02 to $2.98 per 1 million BTU. Gold was down $2.20 to $1,321.50 an ounce, while silver was up $0.05 to $19.18 an ounce. Copper was unchanged at $2.19 per pound.
Among energy ETFs, the United States Oil Fund was up 2.68% to $10.93 with the United States Natural Gas Fund was down 0.70% to $8.55. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 1.26% to 26.56 while SPDR Gold Shares was down 0.42% to $125.69. The iShares Silver Trust was down 0.38% to $18.14.
Here's where the markets stand at mid-day:
NYSE Composite Index was down 18.20 points (-0.17%) to 10,735.66
Dow Jones Industrial Index was down 39.68 points (-0.21%) to 18,299.87
S&P 500 was down 4.46 points (-0.21%) to 2,166.73
Nasdaq Composite Index was down 22.61 points (-0.43%) to 5,295.86
FTSE 100 was up 70.04 points (+1.02%) to 6,919.42
DAX was down 32.80 points (-0.31%) to 10,405.54
CAC 40 was up 11.39 points (+0.26%) to 4,443.84
Nikkei 225 was up 228.31 points (+1.39%) to 16,693.71
Hang Seng Index was up 119.82 points (+0.51%) to 23,739.47
Shanghai China Composite Index was up 10.62 points (+0.36%) to 2,998.48
NYSE SECTOR INDICES
NYSE Energy Sector Index was up 109.10 points (+1.03%) to 10,737.02
NYSE Financial Sector Index was down 13.05 points (-0.21%) to 6,258.18
NYSE Healthcare Sector Index was down 163.08 points (-1.29%) to 12,493.41
(+) CATB (+62.72%) Forms Duchenne muscular dystrophy collaboration with Serepta ( SRPT )
(+) AEGR (+20.33%) Juxtapid capsules have been approved for use in Japan for the treatment of homozygous familial hypercholesterolemia
(+) ARWR (+9.16%) and AMGN (+1.11%) reported two cardiovascular collaborations
(+) CLRB (+4.35%) Phase 1 study of CLR 131 showed patients with refractory multiple myeloma achieved stable disease and progression-free survival
(-) ITCI (-63.29%) ITI-007 for the treatment of schizophrenia failed a late-stage study
(-) ADHD (-54.55%) FDA places clinical hold on investigational new drug application for MDX to treat ADHD
(-) MRNS (-28.74%) Positive results of epilepsy drug downplayed due to small sample size
(-) ATNM (-21.47%) riced 8 million share offering at 26% discount to Wednesday's closing price