June 24th 2014 – Dow Hit Hard On Iraq Concerns
Market View:
So the reports were good, but the market is looking for a reason to do some profit taking. The Nasdaq led the rally earlier, however the DOW did not take part and eventually the sentiment turned sour.
So that is the 3 day in a row that the DOW is showing weakness, so my expectation is a little bounce tomorrow, but worries have switched from the Ukraine to Iraq. We shall just have to see how that turmoil play out on the market in the coming days.
Market News:
U.S. stocks declined on Tuesday, with the S&P 500 retreating from a record for a second day, as geopolitical concerns overshadowed better-than-expected reports on housing and consumer confidence.
The CBOE Volatility Index, one measure of investor uncertainty, spiked nearly 11 percent to 12.16.
In Iraq, U.S. Secretary of State John Kerry urged Iraqi leaders to form a united front against insurgents now in control of portions of the second-largest oil producer in OPEC.
After rising to within 9 points of its intraday record, the Dow Jones Industrial Average ended down 119.13 points, or 0.7 percent, at 16,818.13, with Exxon Mobil pacing blue-chip declines that reached 26 of 30 components and marked the benchmark’s worst day in more than a month.
After rising to an intraday record of 1,968.18, the S&P 500 fell 12.63 points, or 0.6 percent, to 1,949.98, with energy falling the hardest and utilities faring best among its 10 major sectors.
The Nasdaq dropped 18.32 points, or 0.4 percent, to 4,350.36.
Gold futures rose $2.90, or 0.2 percent, to $1,321.30 an ounce, and crude futures fell 14 cents, or 0.1 percent, to $106.03 a barrel.
The Case-Shiller index of home prices rose 10.8 percent in April from the year earlier, and 1.1 percent from the prior month.
New-home sales for May jumped to a six-year high in May, up 18.6 percent to a seasonally adjusted annual rate of 504,000 units. The number, better than the 440,000 forecast by economists, comes a day after a report that had existing-home sales rising more than expected last month.
Also, the consumer confidence index for June came in at 85.2, beating estimates of 83.
Speaking in New York on Tuesday, Philadelphia Federal Reserve Bank President Charles Plosser said the economy is nearing the central bank’s targets more quickly than expected, and could have the Fed increasing interest rates sooner than anticipated.
Abe lets another arrow fly in Japan: Japan’s government has released details on the third and final phase of Prime Minister Shinzo Abe’s ambitious plan to jolt the country’s economy out of stagnation. Companies may pay less tax as a result, but the response in the stock market was muted. The Nikkei ended flat.
European markets ended mixed.
The ruble and Moscow stock index were stronger, continuing their recovery from sharp losses earlier this year as fears about an escalation of the crisis in Ukraine fade. A ceasefire between government forces and pro-Russian separatists declared last Friday appears to be holding.
Wednesday:
Earnings: General Mills, Monsanto, Apollo Educations Group, Barnes & Noble, Bed Bath & Beyond, Herman Miller
8:30 a.m.: GDP revision
8:30 a.m.: Durable goods orders
News Sources: CNBC and CNN Money