Stocks sank on Wednesday after the Census Bureau reported that housing starts fell 16 percent in January from December’s level.
Stocks took a hard fall on Wednesday after the Commerce Department’s Census Bureau reported that during January, housing starts fell to a
seasonally-adjusted annual rate (SAAR) of 880.000. The result was 16 percent lower than December’s SAAR of 1,048,000. Housing starts are closely watched as they impact the construction industry, the labor market and a wide variety of other industries which benefit from new home construction (such as appliances, etc.). Economists had been expecting to see a SAAR of 950,000.
The Dow Jones Industrial Average (NYSEARCA:DIA) lost 89 points to finish Wednesday’s trading session at 16,040 for a 0.56 percent decline, falling 65 points below its 50-day moving average of 16,105. The S&P 500 (NYSEARCA:SPY) dropped 0.65 percent to close at 1,828.
The Nasdaq 100 (NASDAQ:QQQ) fell 0.72 percent to finish at 3,652. The Russell 2000 (NYSEARCA:IWM) sank 1.07 percent to end the day at 1,149.
In other major markets, oil (NYSEARCA:USO) advanced 0.65 percent to close at $36.90.
On London’s ICE Futures Europe Exchange, April futures for Brent crude oil dipped 4 cents (0.04 percent) to $110.42/bbl. (NYSEARCA:BNO).
April gold futures declined $7.30 (0.55 percent) to $1,313.10 per ounce (NYSEARCA:GLD).
The transportation sector rolled into a ditch on Wednesday, as the Dow Jones Transportation Average sank 1.26 percent to 7,140, falling further below its 50-day moving average of 7,276 (NYSEARCA:IYT).
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks fell as the yen strengthened to 102.16 per dollar during the last 90 minutes of Wednesday’s trading session in Tokyo. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (NYSEARCA:FXY). The Nikkei 225 Stock Average declined 0.52 percent to 14,766 (NYSEARCA:EWJ).
In China, stocks advanced as investors anticipated a more-upbeat flash February HSBC China Manufacturing PMI report, which is scheduled for release on Thursday. After the January HSBC Manufacturing PMI hit a six-month low of 49.5, China’s investors remained hopeful for a better reading this month. The Shanghai Composite Index jumped 1.11 percent to 2,142 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index advanced 0.34 percent to 22,664 (NYSEARCA:EWH).
In Europe, stocks spent the afternoon digging their way out of a rut, which was created by some disappointing earnings reports. The Euro STOXX 50 Index finished Wednesday’s session with a 0.11 percent advance to 3,120 – climbing further above its 50-day moving average of 3,058. Its Relative Strength Index is 61.07 (NYSEARCA:FEZ).
Technical indicators revealed that the S&P 500 managed to stay above its 50-day moving average of 1,813 after finishing Wednesday’s trading session with a 0.65 percent decline to 1,828. Its Relative Strength Index (RSI) fell from 60.70 to 56.25. The MACD is climbing above the zero line, suggesting that the S&P could resume its advance during the immediate future.
On Wednesday, all sectors were in negative territory, except for the energy sector, which advanced 0.13 percent. The financial sector took the hardest hit, falling 1.38 percent.
Consumer Discretionary (NYSEARCA:XLY): -0.81%
Technology: (NYSEARCA:XLK): -0.33%
Industrials (NYSEARCA:XLI): -0.94%
Materials: (NYSEARCA:XLB): -0.69%
Energy (NYSEARCA:XLE): +0.13%
Financials: (NYSEARCA:XLF): -1.38
Utilities (NYSEARCA:XLU): -0.57%
Health Care: (NYSEARCA:XLV): -0.61
Consumer Staples (NYSEARCA:XLP): -0.22%
Bottom line: A downbeat report on housing starts from the Commerce Department’s Census Bureau sent stocks falling on Wednesday, pushing the Dow back below its 50-day moving average.
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