Midday Update: Wall Street Unwinds Early Losses as Geopolitical Tensions Fade
The Dow Jones Industrial Average has erased all of its early losses that followed the Turkish downing Tuesday morning of a Russian fighter jet and a measure of consumer confidence falling to a 14-month low. The flight-to-safety into gold and U.S. Treasury securities had largely evaporated by mid-day as investors moved back into riskier assets as the geopolitical risks from events overseas dissipate. A rally in crude oil prices today also was driving the energy sector significantly higher, helping pare declines for the broader markets.
Tuesday's heavy economic calendar kicked off with an as-expected upward revision to third quarter GDP to an annual pace of 2.1% from the preliminary read of 1.5%, led by stronger-than-expected inventory accumulation.
Corporate profits contracted 1.6% while home prices increased 0.6% during November and the U.S. trade deficit narrowed to $58.4 billion from $58.6 billion.
Also, a less favorable view of the U.S. job market was reflected in an unexpected decay in consumer confidence in November to a 14-month low of 90.4. Analysts were predicting an increase in confidence to 99.6 from October's revised 99.1 reading.
European equities pared some of their earlier losses but still closed with sizable losses in reaction to Turkey shooting down a Russian jet and subsequent response from Russian President Vladimir Putin calling the Turkish action a "stab in the back." Travel stocks were the hardest hit while oil stocks advanced on geopolitical tensions in the Middle East from the incident.
Crude oil was up $1.27 to $43.00 per barrel. Natural gas was down 4 cents to $2.31 per 1 million BTU. Gold was up $8.80 to $1,075.50 per ounce, while silver was up 17 cents to $14.23 an ounce. Copper was up 6 cents to $2.08 per pound.
Among energy ETFs, the United States Oil Fund was up 3.07% to $13.41 with the United States Natural Gas Fund was down 1.10% to $9.01. Among precious-metal funds, the Market Vectors Gold Miners ETF was unchanged at 21.56 while SPDR Gold Shares were up 0.74% to $103.02. The iShares Silver Trust was up 1.19% to $13.61.
Here's where the U.S. markets stood at mid-day:
NYSE Composite Index up 7.90 (+0.08%) to 10,429.31
Dow Jones Industrial Average down 1.37 (0.00%) to 17,791.31
S&P 500 down 2.82 (-0.14%) to 2,083.77
Nasdaq Composite Index down 20.23 (-0.40%) to 5,082.25
Nikkei 225 Index up 0.23%
Hang Seng Index down 0.35%
Shanghai China Composite Index up 0.16%
FTSE 100 Index down 0.45%
CAC 40 down 1.41%
DAX down 1.43%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 2.42%
NYSE Financial Sector Index down 0.45%
NYSE Healthcare Sector Index down 0.16%
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