Wall Street: U.S. stocks closed lower on Wednesday, breaking a four day winning streak, but managed to close well off the lows. Weak economic data (ADP employment, ISM non-manufacturing index and factory prices) was the catalyst for the drop along with Fed Chairman Bernanke warning that rising U.S. debt will put a strain on financial stability. Financials continued to decline with Prudential Financial losing 2.85%. General Motors shares, which are now trading on the Pink Sheets, continued to drop. Energy stocks weakened, due to oil prices falling, led by ExxonMobil and Chevron. On the day, the DOW dropped 65.63 points to close on 8675.24. The S&P fell 12.98 points to close on 931.76 and the NASDAQ lost 10.88 points to close on 1825.92.
Europe: European shares closed Wednesday’s trade lower after U.S. ISM non-manufacturing index and factory orders came in below analysts’ expectations. The moves lower were led by banking and energy stocks. Barclays fell 5%, UBS dropped 4.2% and Deutsche Bank fell almost 4%. Energy stocks moved lower as oil prices declined. Total dropped 3% and BP lost 2.2%. On the day, the German DAX lost 90 points; the CAC 40 dropped 68 points while the U.K.’s FTSE lost 94 points.
Asia: Asian stocks moved higher again on Wednesday, trading close to eight month highs as traders continue to be optimistic the global economic recession has seen the worst. However, there is still caution in the markets as the recent rallies in global stocks have traders speculating whether the move can be sustained. The Nikkei moved higher with resource companies and computer chip makers leading the way. The Japanese Nikkei gained 37 points while the Hang Seng gained 187 points.
Financial Sector: In trade on Wednesday the XLF, the financial sector ETF, lost 0.21 points (1.73%) to trade at 11.95. It moved lower on light volume; 77.5m ETF's changed hands, well below the ten day average of 182.7m. Equity markets closed lower on Wednesday in a session that saw the major indexes move lower from the open on somewhat disappointing data and comments from Fed Chairman Bernanke’s testimony on Capitol Hill, and struggled to find traction throughout the day.
Treasuries: Treasuries rose once again on Tuesday on the heels of Federal reserve Chairman Ben Bernanke saying large budget deficits threaten financial stability and that the central bank bought $7.5 billion of government securities. Ten year yields fell 8 basis points to 3.54%. The budget deficit is projected to reach $1.845 trillion in the year ending in September, from last year’s $455 billion deficit.
Crude oil: Oil prices dropped on Wednesday, falling below $66 a barrel. The move was initiated by an unexpected rise in U.S. crude stockpiles and the dollar strengthening throughout the day. Crude oil inventories spiked 2.9 million barrels last week as imports rose. Oil lost approximately $2.50 a barrel today to close near $66 a barrel.
Gold Bullion: Gold prices dropped significantly on Wednesday as reversed the recent trend and strengthened against all of the other major currencies. Gold prices fell $22.50 an ounce today and closed the day near the $962 an ounce level. Often times the dollar and gold have an inverse relationship. When the dollar weakens, traders usually move into gold as a safe haven. On days like today when the dollar strengthens significantly, gold prices usually drop.