Dow Jones Industrial Average is going down due to bad news

Dow Jones Industrial Average decreased gradually, but steadily

In brief: Dow Jones Industrial Average started trading in negative zone. Trading volume at the U.S. stock market today are very low.

Dow Jones Industrial Average may continue trading on the U.S. stock market in a negative mood on the background of macroeconomic problems the United States. U.S. stock futures slid Wednesday after home construction plunged in May, adding to the concerns about global growth amid new worries over Spain’s fiscal stability. Following the housing data, Dow Jones Industrial Average futures fell 61 points to 10271, while Standard & Poor’s 500-share futures dropped 8 points to 1101 and Nasdaq 100 futures slid 12 points to 1881.

Prior to the data, Dow futures had been down 49, S&P 500 futures had dropped 7 and Nasdaq 100 futures slid 10. The Commerce Department said Wednesday that housing starts dropped 10% the month after the government ended its homebuyer tax credit program, to a seasonally adjusted annual rate of 593,000. Economists surveyed by Dow Jones Newswires expected overall housing starts to drop 5.2% to a level of 637,000. Building permits also decreased 5.9% to an annual rate of 574,000, surprising economists who had expected a 3.3% rise. More encouragingly, inflation pressures remained tame in May. The Labor Department said Wednesday the index of producer prices, which measures how much manufacturers and wholesalers pay for goods and materials, fell a seasonally-adjusted 0.3% for finished goods in May from April. Stripping out more-volatile food and energy prices, wholesale inflation rose by 0.2% last month as prices rose for light motor trucks. Economists polled by Dow Jones Newswires were expecting producer prices to fall 0.5% in May. Core producer prices were seen rising 0.1% from April.

Depressing stock futures earlier in the morning, delivery group FedEx reported a stronger-than-forecast profit jump for the fiscal fourth quarter, but delivered weaker-than-anticipated current year guidance, citing pensions, health care and maintenance. Shares of the package-shipping giant, considered a global economic bellwether because of the breadth of goods it ships, fell 2.6% in premarket trading. Renewed talk of a bailout for Spain caused euro zone debt concerns to flare again. As International Monetary Fund head Dominique Strauss-Kahn heads to Spain, a newspaper report said the E.U., IMF and the U.S. Treasury are talking about a EUR250 billion credit line for the euro-zone country beset by unemployment over 20%. Spain and the IMF denied the report, but Spain’s risk premium, as measured by the yield spread on Spanish bonds over German bunds, hit its highest level since the creation of the euro. The Stoxx Europe 600 edged down recently, weighed by concerns over Spain’s funding woes and France’s decision to raise its retirement age, – reports Wall Street Journal. The euro was trading recently around $1.2264. American depositary shares of BP fell 4% after President Barack Obama blasted the company in a nationally televised address on Tuesday evening, calling for the oil giant to set up an independently administered escrow account to pay claims from the Gulf of Mexico oil spill. Obama also talked of the need for more renewable energy. The president is also scheduled to meet with BP chairman Carl-Henric Svanberg on Wednesday morning and is expected to discuss the company’s dividend payments as well. Among other stocks in focus, Nokia slid 10% after cutting its second-quarter financial guidance, citing competition in the high-end market segment, a shift to products with lower margins and the recent depreciation of the euro.

Ukrainian Globalist
2010-06-16 13:34, Economics.

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