European Worries Weigh on Dow
FOX Business: The Power to Prosper
Ongoing anxiety over the situation in Europe weighed on the blue chips, while commodities struggled following a bearish weekly inventory report.
Today's Markets
As of 3:06 p.m. ET, the Dow Jones Industrial Average fell 32.5 points, or 0.26%, to 12429, the S&P 500 slipped 1.2 points, or 0.09%, to 1291 and the Nasdaq Composite rose 6.6 points, or 0.24%, to 2709.
Traders paid close attention to developments from Europe on Wednesday with little economic data released on the day.
Germany's economy, Europe's biggest, expanded at a pace of 3% last year, slower than the 3.7% pace it grew at the year prior, according to preliminary data from Federal Statistics Office. The country's economy also contracted by a quarter percent in the final quarter of 2011 as it struggled to counteract headwinds caused by the eurozone's debt crisis.
Indeed, the report "doesn't bode well" for the currency bloc's overall economy because Germany is such an important economic player there, Manoj Ladwa, a senior trader at ETX Capital told FOX Business in an interview.
Fitch Ratings also warned that if Italy is unable to make it through its debt crisis it could cause a "cataclysmic" break-down of the euro, Reuters reported, citing David Riley, the company's head of sovereign ratings. The ratings company also urged the European Central Bank to boost its purchases of beleaguered European sovereign debt, according to the report, a move that analysts say could help push borrowing costs down for countries like Italy and Spain on private credit markets.
In European bond markets, Germany held a successful auction of five-year paper a day ahead of offers by Italy and Spain. Italy's 10-year note is still yielding slightly more than 7%, lower than the prior day, but a level that could make it difficult to the country to cut its deficit and refinance its debt this year.
The euro dipped 0.72% to $1.2686, touching a 16-month low against the U.S. dollar, while the greenback rose 0.61% against a basket of six world currencies. European blue chips were down 0.37%.
The Energy Department said crude oil inventories jumped 4.96 million barrels last week, a much bigger build than the 1.1 million analysts forecast. Meanwhile, gasoline stocks were up 3.61 million barrels, also a wider increase than the 2.1 million analysts projected. Generally, higher-than-expected inventories push prices lower.
The benchmark crude oil contract traded in New York fell $1.37, or 1.3%, to $100.87 a barrel. Wholesale RBOB gasoline slipped 0.34% to $2.763.
As a result, energy shares were under pressure. Energy giants Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) were among the worst performers on the Dow on the day, while oil field servicing company Halliburton (NYSE:HAL) was among the top 15 laggards on the broad S&P 500.
On the U.S. front, the Federal Reserve said on Wednesday the economy improved modestly in the final part of 2011, with consumer spending picking up in most of its districts. Traders said the report did not reveal very much new information, which is why the market had little reaction following its release.
In metals, gold rose $8.20, 0.5%, to $1,639 a troy ounce.
Corporate News
Hostess Brands, the maker of Twinkies and Wonder Bread, filed for Chapter 11 bankruptcy protection after previously emerging from bankruptcy just three years ago.
Supervalu (NYSE:SVU) unveiled a deeper fiscal third-quarter loss and slashed its guidance amid weaker-than-expected sales for the grocery store chain.
Foreign Markets
European blue chips were down 0.37%, the English FTSE 100 slid 0.45% to 5,671 and the German DAX fell 0.17% to 6,152.
In Asia, the Japanese Nikkei 225 climbed 0.3% to 8,448 and the Chinese Hang Seng rose 0.78% to 19,152.