While you were sleeping: Upbeat US jobs, housing
Jan. 20 (BusinessDesk) - Wall Street declined as investors geared up for a speech by Federal Reserve Chair Janet Yellen
later in the day and US President-elect Donald Trump’s inauguration on Friday.
Across the Atlantic, European Central Bank policy makers kept key interest rates and asset purchase program unchanged.
President Mario Draghi told reporters that underlying inflation pressures remain subdued, flagging the central bank’s
commitment to ongoing stimulus.
The latest US economic reports offered better-than-expected labour and housing market data, bolstering the greenback and
sending Treasuries lower.
A Labour Department report showed jobless claims fell by 15,000 to 234,000 in the week ended January 14. Separately, a
Commerce Department report showed that US housing starts rose a higher-than-expected 11.3 percent in December to a 1.23
million annualised rate.
"It's fair to say, the economy is near maximum employment and inflation is moving toward our goal," Yellen told the
Commonwealth Club of California in San Francisco on Wednesday. "As the economy approaches our objectives, it makes sense
to gradually reduce the level of monetary policy support.”
Even so, Wall Street moved lower. In 1.21pm trading in New York, the Dow Jones Industrial Average declined 0.2 percent,
while the Nasdaq Composite Index slipped 0.1 percent. In 1.06pm trading, the Standard & Poor’s 500 Index retreated 0.2 percent.
The Dow slid as declines in shares of Exxon Mobil and those of Goldman Sachs, recently 1.4 percent and 1 percent weaker
respectively, outweighed gains in shares of UnitedHealth and those of Caterpillar, up 1.1 percent and 0.4 percent
respectively.
Wall Street has eased from recent record highs as investors reassessed bets that Trump will follow through on promises
of increased government spending and looser regulation.
"We may give Trump the benefit of doubt in the first hundred days," Sam Stovall, chief investment strategist at CFRA
Research, told Reuters. "But unless we see some legislation being passed through Congress, this hype might turn into
gripe and end up being a trigger for the digestion of gains."
Bucking the trend, shares of CSX soared after the Wall Street Journal reported that Hunter Harrison, the railroad
veteran who announced his early departure from Canadian Pacific Railway on Wednesday, is joining with an activist
investor in an attempt to shake up management at the US rival.
In Europe, the Stoxx 600 Index finished the day with a 0.1 percent decline from the previous close. Germany’s DAX Index
inched 0.02 percent lower, France’s CAC 40 Index fell 0.3 percent, while the UK’s FTSE 100 Index dropped 0.5 percent.
(BusinessDesk)