U.S. and Global Markets Await ECB Action

Nichole Harper
04 Jun, 2014
New York City

U.S. stocks traded sideways and a measure of productivity showed a sharp decline in the first quarter. U.S. trade deficit widened to a 2-year high on higher imports of foods, auto, electronic products and crude oil.

[R]10:40 AM New York – U.S. stocks traded sideways and a measure of productivity showed a sharp decline in the first quarter. U.S. trade deficit widened to a 2-year high on higher imports of foods, auto, electronic products and crude oil.[/R]

Stocks traded sideways in early trading after trade deficit in April widened to a 2-year high and productivity declined in the first quarter.

S&P 500 index declined 0.7 to 1,923.56 and the Nasdaq Composite Index decreased 5.32 to 4,239.41.

The measure of employee output per hour declined at a revised annual pace of 3.2% from 2.3% increase in the final quarter of 2013, according to a Labor Department report.

Unit labor cost increase was revised higher at a 5.7% annual rate by the department.

U.S. Trade Deficit Widens to a 2-year High

U.S. exports declined 0.2% to $193.3 billion in April, a decline of $300 million from March and imports increased 1.2% or $2.7 billion to $240.6 billion, the Commerce Department said today.

The increase in imports were driven by higher demand for food products, foreign made cars and computers and electronic products.

Imports from South Korea were at a record high and $14 billion trade deficit with the European Union and $7 billion with Germany were highest since the record keeping began.

Trade gap with China increased 33.7% to $27.3 billion in April, the largest gap since January and the largest trade gap with any nation.

The government agency said trade deficit in goods and services in April increased 6.9% to $47.2 billion from revised $44.2 billion in March. March month deficit originally was estimated at $40.4 billion.

In April month, petroleum imports decreased 2.2% to $29.8 billion and U.S. petroleum exports increased 3.1% to $11.8 billion.

European Markets

European stocks traded mixed ahead of ECB announcement tomorrow. Investors are hoping for additional liquidity measures for banks that will facilitate rise in loans to businesses.

In London trading, FTSE 100 index rose 0.2% or 12.57 to 6,857.08 and in Frankfurt the DAX index slid 0.2% or 15.45 to 9,927.82.

In Paris, CAC 40 index fell 0.3% or 11.22 to 4,508.35.

Asian Markets

Investors bid up stocks for the tenth day in a row in Tokyo and the yen weakened and steelmakers and exporters led the gainers.

The Bank of Japan said monetary base in May grew 0.5% to 226.62 trillion yen from April, a record high for the fourth month in a row amid to increase the monetary base to 270 trillion yen by the end of the year to achieve 2% of inflation target.

The Finance Ministry reported tax revenue collected in April climbed 4.4% to 4.51 trillion yen and income tax revenue rose 6.6%. Revenue from consumption tax jumped to 4.5% and corporate tax revenue declined to 10%.

Cumulative tax revenue for the year ending in March soared 5.3% to 39.85 trillion yen from a year ago.

The Nikkei 225 Stock Average rose 33.71 or 0.2% to 15,067.96 and the broader Topix index rose 5.36 to 1,233.95.

The Sensex Index fell 52.76 or 0.2% to close at 24,805.83 The CNX Nifty slid 13.60 to 7,402.25.

The largest auto maker in India, Maruti Suzuki said production in May jumped 20%. National Fertilizer Limited advanced after net loss narrowed as net sales surged 73%.

Trent, controlled by Tata Group said U.K. based Tesco completed its stake acquisition in Trent Hypermarkets.