Published February 21, 2013
FOX Business: Capitalism Lives Here
The selling continued on Wall Street Thursday, a day after the S&P took its biggest tumble since November, as oil prices swooned and traders responded to a batch of mixed data.
The Dow Jones Industrial Average fell 46.9 points, or 0.34%, to 13881, the S&P 500 dipped 9.5 points, or 0.63%, to 1502 and the Nasdaq Composite slumped 32.9 points, or 1%, to 3131.
Wall Street's largely smooth New Year's rally came to a screeching halt Wednesday, with the S&P 500 taking its biggest thrashing in months -- a trend the continued into Thursday. The VIX, which tracks implied volatility, has also surged more than 20% so far for the week in a sign the markets could be in for more gyrations.
Comments in the latest round of Federal Reserve minutes suggesting the central bank may taper asset purchases sooner than expected, coupled with heavy selling in the commodities complex, sparked the move lower. The momentum carried into Thursday, with shares in Asia and Europe getting hit hard.
Energy futures were down sharply, after oil took its worst slide since November on Wednesday. Several traders chalked up the swift move lower to chatter that a large commodities fund was unwinding positions. Those reports couldn't be confirmed, however, Olivier Jakob, managing director at Petromatrix in Switzerland, notes "we need to keep in mind that hedge funds do not necessarily need to be 'in trouble' to liquidate some positions."
The benchmark U.S. oil contract dropped $2.38, or 2.5%, to $92.84 a barrel. Wholesale New York Harbor gasoline dipped 0.75% to $3.066 a gallon. Meanwhile, in metals, gold rose 60 cents, or 0.04%, to $1,569 a troy ounce.
On the corporate front, Wal-Mart (WMT) posted quarterly profits of $1.67 a share, beating estimates by 10 cents. However, the world’s biggest retailer’s revenues of $127.1 billion came in shy of expectations of $128.8 billion. The company also boosted its dividend for its current fiscal year 18% to $1.88 a share.
There is a raft of data on the American economy on tap as well.
The National Association of Realtors reported U.S. existing home sales rose 0.4% in January from December to a 4.92-million unit annualized rate, slightly beating estimates of 4.9 million.
The Labor Department said inflation at the consumer level remained unchanged in January from December. Economists were expecting a 0.1% gain. Excluding the food and energy components, prices were up 0.3%, topping the 0.2% gain expected and marking the largest rise since May 2011.
A different report from Labor showed claims for unemployment benefits rose to 362,000 last week from an upwardly revised 342,000 the week prior. Claims were expected to rise to 355,000 from an initially reported 341,000.
The Philadelphia Federal Reserve's gauge of manufacturing activity in the mid-Atlantic region fell to -12.5 in February from -5.8 in January. The index was expected to rise to 1.0. Readings above zero point to expansion while those below indicate contraction.
The Euro Stoxx 50 dropped 1.8% to 2594, the English FTSE 100 fell 1.6% to 6291 and the German DAX sold off by 1.8% to 7590.
In Asia, the Japanese Nikkei 225 tumbled 1.4% to 11309 and the Chinese Hang Seng plummeted 1.7% to 22907.