The Singapore stock market has ended in negative territory now in consecutive sessions after the five-day winning streak in which it added more than 175 points or 10 percent en route to a 12-week high. The Straits Times Index fell through support at 1,800 points, but now investors are hopeful that the market can recoup those losses at the opening of trade on Thursday.
The global forecast for the Asian markets is fairly positive after suffering a modest downside correction in the previous session. Mixed economic and corporate data out of the United States is expected to keep the markets from straying too far from the unchanged line in either direction. The markets in Europe, Canada and the United States all finished with modest gains, and the European markets are projected to follow that path.
The STI finished sharply lower on Wednesday, with heavy losses among the financials, properties and rig builders.
For the day, the index retreated 18.43 percent or 1 percent to close at 1783.96 points after trading between 1,754.33 and 1,786.25. Volume was 1.1 billion shares, with decliners outnumbering gainers 270 to 170.
Among the decliners, City Developments fell 5.2 percent, while Keppel Corp was down 2.9 percent, Neptune Orient Lines lost 6.7 percent, SMRT was up 3.4 percent, Singapore Press Holdings gained 1.1 percent, CapitaLand was down 2.7 percent and DBS Group fell 3.7 percent.
The lead from Wall Street is cautiously optimistic as stocks ultimately closed higher after enduring choppy trading for much of Wednesday's session. The uncertainty seen for most of the day came as investors responded to a mix of positive and negative news from both the economic and corporate fronts.
In economic news, wholesale inventories fell by much more than economists had been expecting in the month of February, according to a report released by the Commerce Department, although the report also showed an increase in wholesale sales. The report showed that wholesale inventories fell 1.5 percent in February following a revised decrease of 0.9 percent in January. Economists had expected inventories to fall by 0.6 percent compared to the 0.7 percent decrease originally reported for the previous month.
At the same time, the Commerce Department said that wholesale sales edged up 0.6 percent in February following a 2.4 percent decrease in January. The increase in sales came on the heels of seven consecutive monthly decreases.
Separately, the Mortgage Bankers Association revealed that its index of mortgage application volume rose 4.7 percent on a seasonally adjusted basis for the week of April 3rd following a 3 percent increase in the previous week.
Later, stocks saw some weakness on the heels of the minutes of the March Federal Open Market Committee meeting, which said that committee members remain concerned about downside risks to an already weak outlook for economic activity. The minutes showed that nearly all of the meeting participants felt that economic conditions had deteriorated relative to their expectations at the time of the January meeting.
On the corporate front, Pulte Homes (PHM) has agreed to acquire rival Centex Corp. (CTX) in a stock-for-stock deal. The deal is valued at $1.3 billion and will create the nation's largest homebuilding company. Under the terms of the agreement, Centex shareholders will receive 0.975 shares of Pulte common stock for each share of Centex they own. Based on Pulte's closing price on Tuesday, the deal values Centex at $10.50 per share, a 38 percent premium to Centex's closing price.
Meanwhile, Dow component Alcoa (AA) reported a $497 million net loss for the first quarter, hurt by the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminum prices.
The major averages all ended the day in positive territory, although off their best levels of the day. The Dow closed up 47.55 points or 0.6 percent at 7,837.11, the NASDAQ closed up 29.05 points or 1.9 percent at 1,590.66 and the S&P 500 closed up 9.61 points or 1.2 percent at 825.16.
For comments and feedback: contact firstname.lastname@example.org