Market Keeps Tapering Down

December 3rd, 2013
in Gary's blogging, market close, syndication

Written by

Closing Market Commentary For 12-03-2013

Gary is off today, and the closing market commentary comes from our syndication partner

U.S. stocks fell on Tuesday after investors bet that the Federal Reserve remains on track to begin tapering the pace of its monthly bond-purchasing program in early 2014.  In the rest of the world 24 of the 26 major indices tracked by were down for the day.  Only Tokyo (+0.6%) and Shanghai (+0.7%) advanced.

Follow up:

Stimulus tools such as the Fed's USD85 billion in monthly bond purchases drive down interest rates to spur recovery, boosting stock prices in the process, and talk of their dismantling can dampen stock prices by fanning uncertainty as to how equities will perform without a monetary crutch.

Stocks also fell as investors jumped to the sidelines to await the release of Friday's November jobs report.

At the close of U.S. trading, the Dow Jones Industrial Average finished the day down 0.59%, the S&P 500 index fell 0.32%, while the Nasdaq Composite index fell 0.20%.

Stock prices fell on sentiments that a better-than-expected factory gauge released on Monday may precede a healthy jobs report due out Friday that will eventually prompt the Fed to begin winding down bond purchases, which have given stocks support for over a year now.

A day earlier on Monday, the Institute for Supply Management reported that U.S. manufacturing activity in November expanded at its fastest pace since April of 2011, fueling hopes that U.S. recovery is gaining steam.

The ISM manufacturing purchasing managers' index rose to 57.3 in November from 56.4 in October. 

Analysts were expecting the index to fall to 55.0, and the surprise uptick sparked demand for the dollar.

Also pushing down stock prices were bearish November sales numbers from the Ford Motor Company as well as concerns holiday sales may disappoint this year due to aggressive sales campaigns.

Leading Dow Jones Industrial Average performers included Exxon Mobil, up 0.93%, Cisco, up 0.73%, and Coca-Cola, up 0.69%.

The Dow Jones Industrial Average's worst performers included DuPont, down 2.05%, Pfizer, down 1.95%, and Visa, down 1.66%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 1.86%, France's CAC 40 fell 2.65%, while Germany's DAX 30 fell 1.90%. Meanwhile, in the U.K. the FTSE 100 finished down 0.95%.

On Wednesday, the U.S. is to release the ADP report on private-sector job creation, while the Institute of Supply Management is to release its service-sector purchasing managers' index. The U.S is also to publish data on new home sales and data on its trade balance.  U.S. stocks fell on Monday on concerns holiday shopping sales may disappoint, while investors also avoided equities to await the release of Friday's November jobs report.

At the close of U.S. trading, the Dow Jones Industrial Average finished the day down 0.48%, the S&P 500 index fell 0.27%, while the Nasdaq Composite index fell 0.36%.

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