US stock indices returned some of their recent gains when risk aversion returned to the financial markets. Market watchers appear to have gotten tired waiting for an agreement among oil-producing nations to trim or cap output levels in order to keep crude oil prices supported.
The Dow 30 index ended 40.40 points lower to 16,413.43 (-0.25%), the S&P 500 index closed 8.99 points down to 1,917.83 (-0.47%), and the Nasdaq closed 46.5 points down to 4,487.5 (-1.03%). The S&P 500 VIX, which is considered a gauge of market fear, fell 0.67 points to 21.64 (-3.00%) to indicate that risk appetite hasn’t completely faded.
Data from the US economy was actually stronger than expected, as the initial jobless claims report followed with another solid reading of 262K, lower than the projected 275K figure and the previous 269K increase, indicating positive momentum in hiring. The Philly Fed index improved from -3.5 to -2.8 to show a slower pace of industry contraction.
European markets mixed on lack of market data
Equities in the euro zone ended slightly higher, thanks in part to positive euro zone current account balance results, while the UK reported a decline in the FTSE. The UK index closed 58.37 points down to 5,971.95 (-0.97%) as traders priced in expectations ahead of today’s retail sales release. Analysts are expecting to see a 0.8% rebound in consumer spending from the previous 1.0% drop but another weak reading might be in the cards given the slump in wage growth.
Meanwhile, the German DAX closed 86.43 points up to 9,463.64 (-0.92%) and the French CAC 40 closed 6.29 points up to 4,239.67 (+0.15%).
Asian markets poised to end the week in the red?
Asian stock markets are currently in the red, opening weaker after the stock market declines in the previous New York session. The Nikkei 225 is down 384.17 points to 15,821.06 (-2.32%) and the S&P ASX 200 is down 53.50 points to 4,940.50 (-1.03%).
For some analysts, this simply represents profit-taking activity before the end of the week, as investors cash in their gains in previous risk rallies. Further developments on the oil production situation and meetings between OPEC and non-OPEC leaders could emerge over the weekend and traders might not be willing to expose their positions to that kind of event risk or potentially huge gaps by the start of the next trading week.
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