3 Reasons Markets Were Down After European GDP Reports
Markets closed down on Wall Street today: Dow -0.67%, S&P -0.97%, Nasdaq -1.24%, Oil -1.07%, Gold +1.70%.
On the commodities front, Oil (NYSE:USO) fell to $86.94 a barrel, while precious metals were up, with Gold (NYSE:GLD) climbing to $1,787.90 an ounce and Silver (NYSE:SLV) rising 1.80% to $40.05 an ounce.
Today’s markets were down because:
1) Germany. The euro zone’s largest economy only grew 0.1% in the last quarter, according to a report on GDP growth in the EU released this morning. Germany has notoriously been the strongest of the seventeen European nations using the euro, but the country’s second-quarter growth fell short of the euro zone’s 0.2% growth during the second quarter. Most euro-zone countries, particularly those with the largest economies — Germany (NYSE:EWG), France (NYSE:EWQ), Spain (NYSE:EWP), Italy (NYSE:EWI) — has seen economic growth slowing to a halt, and as a result of today’s report showing that even the strongest European economy has been hit by the sovereign debt crises plaguing the region, the euro pared yesterday’s gains and fell to $1.4420.
2) Housing starts. This morning’s residential construction report showed that fewer privately-owned housing units were authorized in July than in June, as was also the case with building permits. While completions were up in July, that only reflects real estate (NYSE:IYR) decisions made months in the past based on different economic factors than those the nation is currently facing.
3) Earnings. Wal-Mart (NYSE:WMT), Home Depot (NYSE:HD) and Urban Outfitters (NASDAQ:URBN) all reported second-quarter earnings this morning, making them some of the most heavily traded stocks today. In the case of Wal-Mart and Home Depot, that was a good thing, with each watching its share price rise throughout the day, while Urban Outfitters shares plummeted after the retailer reported quarterly profit fell 21%.