Wall Street Turns Lower on Fed Dissent, Home Prices Strengthen

Bikram Pandey
25 Sep, 2012
New York City

U.S. stocks drifted lower at close after a Fed official criticized the latest stimulus plan from the Fed and Caterpillar lowered its outlook in 2015. Metropolitan home prices in twenty largest cities increased for the third month in a row.

[R]5:10 PM New York – U.S. stocks drifted lower at close after a Fed official criticized the latest stimulus plan from the Fed and Caterpillar lowered its outlook in 2015. Metropolitan home prices in twenty largest cities increased for the third month in a row.[/R]

U.S. indexes trended higher in early trading after consumer confidence and home price reports but drifted lower after a Fed official criticized the effectiveness of the latest stimulus plan.

The latest consumer confidence index reached to 70.3 in September from the revised 61.3 in August according to the latest data from the Conference Board. The confidence index reached a 7-month high.

The Standard & Poor’s Case-Shiller index for July increased 1.6% for single family homes in 20 cities and gained 1.2% annually. The improvement in home prices is the third month in a row and prices at the low end in most cities gained according to the report released by S&P.

In New York, home prices increased 1.2% from June but declined 2.6% from a year ago month in 2011.

Philadelphia Fed President Charles Plosser said that the latest Fed monetary stimulus will fall short in reviving employment and boost economic growth.

The IMF Chief Lagarde urged European policymakers to approve single banking authority.

C.H. Robinson agreed to acquire Phoenix International. Carnival Corp profit nearly was flat and FactSet net jumped 19%. Neogen net climbed 12% and Red Hat net declined 13%. Paychex estimated fiscal revenues to increase as much as 6%. Staples announced restructuring. Vail Resorts lowers its fiscal outlook.

Caterpillar lowered earnings per share guidance for 2015 from the previous range between $15 and $20 to a new range between $12 and $18.

The European indexes extended losses for the second day. Italy and Spain completed bond auctions today. UK mortgage approvals rose in August. Cairn Energy sold 8% stake in Cairn India for $910 million.

Stocks in Tokyo advanced ahead of the interim dividend deadline. Machinery and equipment makers declined after Caterpillar lowered its 2015 outlook. Panasonic, Toyota and Sony were among the companies the closed higher ahead of going ex-dividend tomorrow.

Australian markets traded lower after commodities and iron ore prices declined. Fortescue Metals awarded $1.5 billion mine management contract to Leighton Holdings.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.68% and on 30-year bond fell to 2.86%.

The U.S. dollar inched lower to $1.2909 to a euro and decreased against the Japanese yen to 77.80 yen.

Immediate delivery futures of Texas crude oil decreased 70 cents to $91.24 a barrel and Brent crude added 42 cents to $110.23, futures of natural gas increased 0.09 cents to $2.93 per mbtu and gasoline price edged up 5.1 cents to 296.85 cents a gallon.

In metals trading, copper increased 1.10 cents to $3.742 per pound, gold decreased $1.40 to $1,763.20 per ounce and silver decreased 15 cents to $33.90.