U.S. stocks declined on Wednesday. Mounting economic tension ahead of IMF talks later this week and weak corporate earnings weighed heavily on Mr. Market.
|DJIA: -0.94% to 14,618.60||S&P 500: -1.43% to 1,552.01||NASDAQ: -1.84% to 3,204.67|
|Gold: -$10.00 to $1,377.40 per ounce||Oil: -2.30% to $86.68 per barrel||U.S. 10-Year: -0.027 points to 1.696%|
Here are three stories that helped move markets on Wednesday:
1)Did the Feds Beige Book Offer Comfort to Investors? Reports from the twelve Federal Reserve Districts suggest overall economic activity expanded at a moderate pace during the reporting period from late February to early April, stated the commentary on current economic conditions compiled by the Federal Reserve, known as the Beige Book. The report indicated that economic growth was buoyed by residential construction and auto manufacturing.
Following the higher taxes put in place by the fiscal cliff negotiations back in January and the implementation of the automatic federal spending cuts known as the sequester in March, the growth thesis put forward many economist postulated that the economy would face tough roadblocks on its path to recovery for the remaining months of the year (Read more.)
2)Central Bank Stimulus: Monetary Spam or Economic Medicine? Last week, the yen climbed to a four-year high of 99.94 against the dollar. The surge was fueled by an announcement made by the Bank of Japan earlier in April: after months of anticipation, the nations central bank has decided to officially initiate a tremendous round of monetary expansion, similar to the strategy employed by the United States and other developed though struggling countries.
All of that spending is expected to take center stage in Group of 20, World Bank, and International Monetary Fund meetings scheduled for later this week and through the weekend. Everyone is interested in a strong Japanese economy, but the repercussions of these measures and their viability need to be explored, one G20 official told Reuters on condition of anonymity… (Read more.)
3) Who Holds the Most Gold? What a difference a day or two can make. Gold went from a tolerable asset to the most hated object on Wall Street. The recent drop in the precious metal has supplied plenty of ammo for gold critics, but major holders are not likely to sell anytime soon.
The rapid decline in gold started on Friday, with the price falling below $1,500 per ounce for the first time since July 2011. The weekend was not nearly long enough to stem the heavy liquidation process. On Monday, gold futures for the most active contract plunged $140.30 to close at $1,361.10 per ounce, its lowest level since February 2011. It was gold’s biggest one-day percentage drop since 1980, and the largest decline in dollar terms on record… (Read more.)
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