World Market Overview
U.S. stocks closed mixed Wednesday, with the Dow industrials just managing to extend their recent winning streak, as an upbeat forecast from Intel Corp. vied with more disconcerting views on the U.S. economy from retailers and the Federal Reserve.
The Dow Jones Industrial Average (DJI) ended up 3.7 points, or 0.04%, to 10,366.72 for its seventh straight session of gains.
Out of 30 components, 14 ended higher. The S&P 500 Index (SPX) fell 0.17 point, or 0.02%, to 1,095.17, dragged lower by financial stocks. Technology fared the best among the index's 10 industry groups.
The Nasdaq Composite Index (RIXF) rose 7.81 points, or 0.4%, to 2,249.84, with the tech heavy index bolstered by Intel's earnings and sales forecast.
Late Tuesday, the world's largest chip maker reported it swung to a profit that topped analysts' expectations and gave a stronger sales forecast. Weighing on sentiment, the Commerce Department said that U.S. retail sales fell 0.5% in June.
And minutes from the Fed's last policy setting meeting showed central bank officials downgraded their expectations for economic growth.
For most of the choppy trading day, tech powered gains. A quartet of technology stocks Cisco Systems Inc. (CSCO), Intel Corp. (INTC), Microsoft Corp. (MSFT) and Hewlett-Packard Co. (HPQ) led advancers on the Dow industrials.
Stocks made minor gains and losses for much of the session, with investors appearing reluctant to make big moves ahead of the next round of earnings. J.P. Morgan Chase & Co. (JPM) and Google Inc. (GOOG) are two of the companies slated to release results Thursday.
European shares snapped a six-session advance Wednesday, as mining and automotive losses offset earnings related gains in the technology sector.
After having moved as high as 257.03 earlier in the session, the Stoxx Europe 600 index ended nearly unchanged, down seven points at 255.92. Separately, U.S. retail sales fell a larger than expected 0.5% in June, government data showed.
Miners, sensitive to economic trends, led the pullback in Europe, with Xstrata shares down 1.3%, while autos pared some sharp gains made Tuesday after BMW Group lifted its outlook. Shares of BMW declined 1.4% while Renault gave up 0.6%.
Among the major regional benchmarks, the French CAC-40 index dropped 0.1% to 3,632.98 and the U.K.'s FTSE 100 index fell 0.3% to 5,253.52.
The German DAX index, meanwhile, added 0.3% to 6,209.76.
Asian markets climbed Wednesday as Intel's strongest-ever quarterly results buoyed technology sector shares, while a robust economic picture in Singapore also aided sentiment. Japan's Nikkei Stock Average added 2.7% and South Korea's Kospi rose 1.3%. Hong Kong's Hang Seng Index rose 0.6% and China's Shanghai Composite gained 0.8%.
Technology shares around the region climbed after Intel, which is seen as a bellwether for the global technology industry and a barometer of corporate demand, posted the best quarter in its 42 year history for the April to June period, after the U.S. market had closed Tuesday.
The company also gave a bullish forecast for the July September quarter. Its shares rose 8.0% in after-hours trading. Tokyo listed chip play Advantest added 5.7%, South Korea's Samsung Electronics rose 3.5% and Taiwan Semiconductor Manufacturing gained 1.3%.
Personal computer stocks also got a boost on expectations Intel's strong results are a harbinger of stronger corporate technology spending, with Taiwan's Acer up 6.1% and Hong Kong listed Lenovo Group 3.2% higher.
Singapore's Straits Times Index advanced 0.8% after data showed the city state's gross domestic product soared 26% on an annualized, seasonally adjusted basis in the second quarter over the preceding three months, trouncing estimates.
Base metals had a mixed finish on the London Metal Exchange Wednesday after a day of choppy trading during which many market participants remained on the sidelines.
Analysts are reporting sustained low volumes, saying there is an unwillingness by market participants to get involved or take large positions until volumes build up and a trend emerges, but that this is in turn exacerbating the directionless and volatile nature of the markets and further deterring participants from entering.
The complex started the day strong, but the metals lost their early morning gains throughout the afternoon. Prices weren't helped by reports from the U.S.
Commerce Department that retail sales were down 0.5% in June, compared with pre-report forecasts for a smaller 0.3% decline. Crude futures settled lower Wednesday as the U.S. Federal Reserve rolled back its outlook for economic growth.
Light, sweet crude for August delivery settled down 11 cents, or 0.1%, at $77.04 a barrel on the New York Mercantile Exchange after rising as high as $78.15. Brent crude on the ICE futures exchange settled 12 cents, or 0.2%, higher at $76.77 a barrel.
The Federal Reserve projected GDP would rise in a range of 3% to 3.5% this year, down from its previous projection in the spring calling for growth of 3.2% to 3.7%.
In the minutes of the Fed's June meeting, policy makers raised the possibility that the economy may need further monetary stimulus if it shows more serious signs of slowing.
The comments from the Fed are the latest signal that the economic recovery is faltering, pushing crude futures lower as traders anticipate that oil demand will slow as well.
The minutes undermined a rally started after the U.S. Energy Information Administration reported a larger than anticipated drop in U.S. oil stockpiles.
Gold futures fell slightly as equities and currency markets were stable, leaving little demand for gold as a rainy day asset.
The most actively traded contract, for August delivery, settled down $6.50, or 0.5%, at $1,207 an ounce on the Comex division of the New York Mercantile Exchange.
Provided by www.morrisonsecurities.com.au