RTTNews - The Australian stock market ended in negative territory for the third consecutive day on Wednesday, mirroring the losses on Wall Street amid mixed economic data. Weaker commodity prices and concerns about the pace and magnitude of economic recovery at home impacted the sentiment.
In the U.S., stocks finished Tuesday's session firmly in the negative despite positive housing starts data. Weaker-than-expected producer price index and industrial production numbers, however, dampened the early euphoria and disappointing sales numbers from Best Buy and comments from President Barak Obama impacted the sentiment amid fresh concerns about global recovery.
A report released by the Commerce Department revealed that housing starts rose sharply by 17.2% during May to an annual rate of 532,000 units from the revised estimate of 454,000 units in April. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month. While single-family starts showed a notable 7.5% rise in May, the jump in housing starts was due in large part to a 77.1% surge in buildings with five units or more.
In a separate report, the Labor Department revealed that producer prices rose 0.2% in May, following a 0.3% percent increase for April. Economists expected the prices to rise 0.6% during the month. Core producer prices, which leave out the impact of volatile food and energy prices, edged down by 0.1% for May. In April, the figure was up by 0.1 percent.
The Federal Reserve, in a separate report, revealed that industrial production fell by 1.1% in May following a revised 0.7% decrease in April. Economists had been expecting production to fall 1.0%. The report also showed that capacity utilization fell to 68.3% in May from a revised 69.0% in the previous month. The capacity utilization rate had been expected to slip to 68.4% from the 69.1% originally reported for April.
The Dow closed down by 107.46 points or 1.3% at 8,505, the Nasdaq closed down by 20.20 points or 1.1% at 1,796 and the S&P 500 closed down by 11.75 points or 1.3% at 912.
The All Ordinaries Index opened unchanged from its previous close at 3,958 and drifted into negative territory mirroring the losses on Wall Street Tuesday. Lower commodity prices and concerns about growth impacted sentiment. The index remained below the unchanged line throughout the session before closing at 3,904, representing a loss of 53.70 points, or 1.36%. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower at 3,904, a loss of 58.40 points or 1.50%.
Crude oil prices ended higher by 52 cents after two days of decline at $70.99 a barrel in Asian trading. Light sweet crude oil finished at $70.47, down $0.15, on Tuesday in New York, amid volatile trading and on concerns about global recovery.
On the economic front, the Australian Bureau of Statistics said that the number of dwelling units commenced during the first quarter dropped 4% sequentially on a seasonally adjusted basis, following a revised 11.5% fall in the fourth quarter. Year-on-year, the housing starts were down 22.5% in the first quarter, reflecting a 16.3% fall in new private sector houses commenced and a 34.9% drop in new private sector other-residential buildings.
A survey released by Westpac Bank and Melbourne University revealed that the pace of economic contraction in the country slowed down in April. The Leading Economic Index for April declined an annualized 3.5 percent, compared to a contraction of 5.1 percent in March, the survey revealed.
Resource stocks dragged the market lower on weak commodity prices. BHP Billiton, the world's largest mining company, declined 2.19%. Rio Tinto edged down 0.14%. Nickel producer Mincor Resources fell 1.33%.
Gold stocks ended lower on lower gold prices. Lihir Gold declined 0.69%, Sino Gold lost 1.11%, and Newcrest Mining fell 1.65%.
Financial stocks also ended weaker. ANZ Bank fell 2.08%, Commonwealth Bank slipped 1.05%, National Australia Bank lost 0.82%, and Westpac Banking Corp. declined 1.31%.
Mixed trading was witnessed among oil stocks. While Woodside Petroleum edged up 0.15% and Santos gained 0.50%, Oil Search ended lower by 1.78%.
CSR Limited, having interest in building materials, sugar and aluminum, rose more than 6% after the company stated that it is planning to spin off its sugar unit.
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