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U.S. stocks flounder on sluggish U.S. indicators; Dow inches up 0.07%

Published 12/19/2013, 04:14 PM
Updated 12/19/2013, 04:16 PM
Investing.com - Lackluster manufacturing and jobs data sent U.S. stocks mixed to lower on Thursday though optimism that the U.S. economy is improving, evidenced by the Federal Reserve's decision to taper monthly bond purchases, cushioned losses.

At the close of U.S. trading, the Dow Jones Industrial Average rose 0.07%, the S&P 500 index fell 0.06%, while the Nasdaq Composite index fell 0.29%.

On Wednesday, the Fed announced that it would cut its USD85 billion-a-month bond-buying program by USD10 billion in January now that recovery is gaining steam.

Fed bond purchases tend to weaken the dollar by driving down long-term interest rates that send investors to assets like stocks to encourage investing and hiring.

While Fed tapering may take away monetary support for stocks, it also signaled to markets that the economy is gaining steam and headed to an environment ripe for improving corporate fundamentals.

Meanwhile, less-than-stellar economic indicators in the U.S. dampened spirits on Wall Street and sparked profit taking.

The Federal Reserve Bank of Philadelphia said that its manufacturing index jumped to 7.0 for December from November’s 6.5 reading, though analysts were expecting the index to rise to 10.0 this month.

A separate report showed that U.S. existing home sales declined 4.3% to a seasonally adjusted 4.90 million units in November from 5.12 million in October. Analysts were expecting U.S. existing home sales to fall 1.5% to 5.03 million units last month.

Also on Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Dec. 14 increased by 10,000 to a seasonally adjusted 379,000, the highest level since March.

Analysts were expecting U.S. jobless claims to fall to 334,000 last week from the previous week’s revised total of 369,000.

In other news, retailer Target shares took a hit on news hackers may have taken credit and debit-card information belonging to 40 million customers.

Also on Friday, Facebook shares slid on news company founder Mark Zuckerberg plans to sell 41.4 million shares worth about USD2.3 billion though the company was quick to point the move was for tax, charitable and other reasons.

Leading Dow Jones Industrial Average performers included Chevron, up 1.49%, Walt Disney, up 1.27%, and DuPont, up 1.04%.

The Dow Jones Industrial Average's worst performers included Caterpillar, down 0.98%, Wal-Mart Stores, down 0.94%, and Microsoft, down 0.89%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 1.67%, France's CAC 40 rose 1.64%, while Germany's DAX 30 rose 1.68%. Meanwhile, in the U.K. the FTSE 100 finished up 1.43%.

On Friday, the U.S. is to round up the week with revised data on third-quarter GDP.











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