While blue-chips declined, most US stocks closed marginally higher Wednesday, sending the Standard & Poor’s 500 Index to the highest level since Oct 2007 as investors compared slowing retail sales with slightly upbeat earnings report.
Before markets opened, data released by the Census Bureau showed US retail sales rose at a seasonally adjusted pace of 0.1 percent in January, matching the median forecasts of economists but well short of a 0.5 percent rise in the previous month. The data indicated consumer spending has started to get affected following an increase in payroll tax at the beginning of the year.
In Washington, President Barack Obama called for raising the federal minimum wage to $9 an hour from the current $7.25 rate in the State of the Union speech Tuesday evening. The president also pledged to increase trade with Europe and urged lawmakers to come together to end the “manufactured” crisis over the federal deficit. The president reiterated his demand that Republicans accept raising tax revenue along with spending cuts as part of his goal of $1.5 trillion in additional deficit reduction over a decade. A balance could be achieved by getting rid of deductions and tax loopholes for the well-off and the well-connected, he said.
The Dow Jones Industrial Average (DJIA) slipped 36 points, below its five year closing high of 14,019 yesterday, with consumer oriented stocks being the main drag on the Dow.
The S&P 500 Index (SPX) finished fractionally higher at 1,520 after wavering between slight loss and gains during the session. Industrials and materials advanced the most while financials and telecom stocks faring the worst among its 10 major business groups.
Treasury prices fell for a third day, pushing yields higher as the government’s auction of $24 billion in 10-year notes attracted fewer than expected bidders, amid signs the US economic recovery is allegedly gaining pace.
The US dollar pared losses against the Japanese yen Wednesday as investors interpreted Tuesday’s G7 statement that policy makers are content to see the yen decline as long as it’s designed to fight deflation.
Meanwhile, European stocks rose for the second straight session Wednesday after euro-area industrial output rose more than forecast and earnings reports from companies topped estimates.
The Stoxx Europe 600 index rose 0.4 percent to 288.27, adding to yesterday’s 0.5 percent gain. The pan-European gauge has added 3.1 percent so far this year.
Our Trend Tracking Indexes (TTIs) barely moved from yesterday’s close as the trading ranges for the indexes have become very tight. The Domestic TTI ended up at +3.11% while the International TTI inched up to +11.55%.
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