After moving in and out of positive territory in today’s session, stocks finished lower amid a slew of mixed earnings and economic reports. Consumer Confidence unexpectedly declined and a read on regional manufacturing activity surprisingly fell into contraction territory, overshadowing a separate release showing domestic home prices continued to rise in December.
On the earnings front, Dow member Home Depot posted mixed quarterly results, but upped its dividend, Macy’s reported softer-than-expected 4Q sales, but reaffirmed its 2014 guidance, while Toll Brothers bested the Street’s estimates, but reported a decline in contract signings. Treasuries gained ground amid the divergent news and gold was higher, while the U.S. dollar and crude oil prices traded lower.
The Dow Jones Industrial Average declined 27 points (0.2%) to 16,180
The S&P 500 Index shed 3 points (0.1%) to 1,845
The Nasdaq Composite was 5 points (0.1%) lower at 4,287
In moderate volume, 639 million shares were traded on the NYSE, and 2.1 billion shares changed hands on the Nasdaq
WTI crude oil fell $0.99 to $101.83 per barrel, wholesale gasoline lost $0.04 to $2.97 per gallon
The Bloomberg gold spot price increased $4.51 to $1,341.48 per ounce
Consumer Confidence unexpectedly drops, while housing prices continue to rise
The Consumer Confidence Index surprisingly declined in February, decreasing from a downwardly revised 79.4 in January, to 78.1, and compared to the 80.0 reading that economists surveyed by Bloomberg had anticipated. The disappointing read on sentiment came as an improvement in the component pertaining to the current situation was more than offset by a decline in the portion related to expectations of business conditions. However, on employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—improved to -18.6 from -20.2 last month.
In housing news, the 20-city composite S&P/Case-Shiller Home Price Index showed a gain in home prices of 13.4% y/y in December, matching the increase that economists had expected, after November’s 13.7% rise. Moreover, month-over-month, home prices were higher by 0.8% on a seasonally adjusted basis for December, compared to forecasts of a 0.6% increase, and following November’s 0.9% gain.
Treasuries finished higher following the data, as the yield on the 2-year note dipped 2 basis points (bps) to 0.31%, while the yields on the 10-year note and the 30-year bond fell 4 bps to 2.70% and 3.66%, respectively.
Tomorrow’s domestic economic calendar will provide new home sales, forecasted to fall to an annual rate of 400,000 in January from the 414,000 posted in the month prior, as well as MBA Mortgage Applications.
Europe and Asia mixed amid Chinese concerns and lackluster data
The European equity markets finished mixed after paring losses in late-day trading that came amid festering Chinese economic concerns, as well as the softer-than-expected U.S. economic data and some lackluster Eurozone reports. On the economic front, Italian retail sales unexpectedly declined in December, Italian consumer confidence and French business sentiment both came in south of economists’ forecasts for this month, and Germany’s 4Q GDP was unrevised at a 0.4% quarter-over-quarter rate of growth, matching estimates.
Stocks in Asia finished mixed, with Japan’s Nikkei 225 Index gaining on the heels of yesterday’s advance in the U.S. and Europe, despite some late-day strength in the yen versus the U.S. dollar. However, China’s Shanghai Composite Index suffered, with property-related stocks continuing to see pressure following yesterday’s reports that some banks in the nation have tightened lending to the sector, as well as data showing home price increases slowed in January. Also, the recent weakness in the Chinese Yuan exacerbated sentiment regarding corporate earnings, per Bloomberg.