U.S. Stocks Turn Lower, Consumer Spending Falls

Nichole Harper
31 May, 2013
New York City

U.S. consumer spending declined for the first time in almost a year but inflation uptick was measured. Market indexes struggled in the early trading Euro zone jobless rate surged to a new record and protesters surround the European Central Bank.

[R]10:10 AM New York – U.S. consumer spending declined for the first time in almost a year but inflation uptick was measured. Market indexes struggled in the early trading Euro zone jobless rate surged to a new record and protesters surround the European Central Bank. Economy in India rose slower than expected 4.8% rate.[/R]

Stocks on Wall Street struggled to go higher and investors looked ahead to central bankers meeting in the coming week.

Consumer spending in the U.S. declined in April by 0.2% after the revised 0.1% increase in March, Commerce Department said today. March data was previously estimated at 0.2% increase.

The unexpected decline surprised economists who were looking for an increase of as much as 0.3%. The decline in spending last month was the first since May 2012.

On Wall Street, the S&P 500 index increased 0.02% to 1,654.72 and the Nasdaq Composite Index increased 0.03% to 3,492.23.

European Markets

Unemployment rate in the euro zone increased to a new high of 12.2% in April, according to the Eurostat. The jobless rate is the highest since the record keeping began in 1995.

In France, unemployment rate increased to a record high and in Italy jobless rate surged to the most in at least 35 years. Young people are bearing the brunt of the weak economic activities.

Youth employment in Italy increased to 40% and in Greece soared to 66% and in France hovered above 35%.

Thousands of demonstrators in Frankfurt surrounded the European Central Bank to protest against the central bank’s handing of Europe’s debt crisis

In London trading, FTSE 100 index fell 0.8% or 55.33 to 6,602 and in Frankfurt the DAX index slid 0.5% or 37.49 to 8,363.

In Paris, CAC 40 index slipped 0.5% or 18.85 to 3,977.

Lloyds Banking Group Plc slid 0.2% to 61.69 pence after the UK based financial service provider agreed to sell a portfolio of U.S. residential mortgage securities business to a number of different institutions for a cash consideration of £3.3 billion.

Asian Markets

Market indexes in Tokyo closed higher and for the week plunged 5.7% in a volatile trading as the market searches the level to settle.

The latest batch of economic data indicated expanding economic activities in Japan after the aggressive action from the central bank.

Industrial production increased 1.7% in April from March when the production rose 0.9%, according to a Trade Ministry report. The index that measures prices in Tokyo showed a slight increase indicating that national prices may also follow.

The Nikkei 225 Stock Average jumped 1.4% to 13,774.54 and for the week Nikkei plunged 5.7% and for the month slid 0.2%.

In Mumbai trading, the Sensex index plunged 2.5% after the March quarter GDP growth was estimated at 4.8%. The index declined the most in 14 months after the dismal economic growth outlook and less than likely rate cut.

Indian rupee accelerated its slide and declined 2% but technology and outsourcing stocks gained on the rupee weakness.

U.S. Stocks in Review

Avago Technologies Ltd ((AVGO)) traded higher after the maker of specialized semiconductors estimated third quarter revenues that were ahead of expectations.

Endo Health Solutions Inc ((ENDP)) dropped after the Food and Drug Administration rejected the company’s injectable testosterone solution and demanded better risk management plan.

Clearwire Corp ((CLWR)) declined 1% after one of the minority shareholders in the company urged the management to recommend against the Sprint Nextel offer after Dish Network lifted its offer.

Palo Alto Networks ((PANW)) plunged 12% after the networking infrastructure company offered lower than expected outlook for the business.