MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 18035.5 -74.61 -0.41%
Nasdaq 5023.64 -31.78 -0.63%
S&P 500 2106.85 -7.91 -0.37%
Japan: Nikkei 225 20059 75.63 0.38%
Hang Seng 28400.3 -42.41 -0.15%
Shanghai Composite 4476.62 0.41 0.01%
S&P BSE Sensex 27225.9 -170.45 -0.62%
Australia: S&P/ASX 5838.6 -109.9 -1.85%
UK: FTSE 100 6946.28 -84.25 -1.20%
PRICE CHG YIELD%
U.S. 2 Year 0/32 0.567
U.S. 5 Year -6/32 1.424
U.S. 10 Year -10/32 2.039
Australia 10 Year -10/32 2.598
China 10 Year 0/32 3.43
India 10 Year -4/32 7.809
Japan 10 Year 1/32 0.303
German 10 Year -1 6/32 0.288
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.8004 -0.0005
Yen (USD/JPY) 119.05 0.04
S. Korean Won (USD/KRW) 1070.32 0
Chinese Yuan (USD/CNY) 6.1972 0.0005
Euro (EUR/USD) 1.1126 -0.0003
WSJ Dollar Index 85.22 0.03
LAST CHANGE % CHG
Crude Oil 58.53 1.47 2.58%
Brent Crude 65.59 0.95 1.47%
Gold 1204 -9.9 -0.82%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
Stocks ended lower as U.S. growth slowed sharply. Government bonds in the U.S. and Europe tumbled on valuation concerns. The dollar tumbled against the euro, and gold prices extended losses after the Federal Reserve's policy statement. Oil prices rose after data showed a slowdown in rapid growth of U.S. supplies.
OPENING CALL:
Japan reports March's preliminary industrial production data on Thursday, which is expected to show a decline of 2.3% compared to a 3.4% decline in February.. The industrial output data have lately flashed some worrying signals for the government of Prime Minister Abe. Late last year, there were encouraging hints that factory output was being boosted by "Abenomics," but the latest string of data are calling those gains into question.
EQUITIES:
U.S. stocks took a hit after data showed a sharp slowdown in the pace of U.S. economic growth in the first quarter, suggesting a deeper early-year slowdown than previously anticipated.
Stocks kicked off the session lower and held on to losses through the afternoon following a report from the Commerce Department that showed the U.S. economy grew a paltry 0.2% in the first quarter, well below expectations.
The economy grew at a much faster 2.2% pace during the last three months of 2014. Wednesday's reading is the latest indicator suggesting a marked slowdown in the U.S. economy early in the year, taking place against the backdrop of a tepid first-quarter earnings season.
Though major U.S. stock benchmarks have advanced in recent weeks, they have done so at an uneven pace. A weak first-quarter earnings season, coupled with slowing economic growth and uncertainty over the Federal Reserve's timeline for interest-rate increases, have made for a rockier few months for stocks. The S&P 500 is up 1.9% so far in April.
The Fed's latest policy statement offered investors little additional clarity on its course of rate increases. The Fed attributed the recent economic slowdown to "transitory factors," but offered little in the way of additional guidance. Chairwoman Janet Yellen did not give her usual news conference, and stocks held losses following the afternoon statement.
The latest round of earnings reports, meanwhile, were a mixed bag. Analysts now expect first-quarter earnings among S&P 500 companies to decline 1.7%, including the 277 companies that have so far reported results, according to FactSet. If confirmed, that would mark the biggest decline in earnings since the third quarter of 2009, though it's an improvement from the expected earnings drop of 4.7% forecast in late March.
Humana Inc. shares dropped 7.2% after the company reported earnings that fell below analysts' expectations on an operating basis. Anthem Inc. posted first-quarter revenue that was lower than analyst forecasts, pushing shares down 2%.
Shares of Wynn Resorts Ltd. fell 17% after the casino operator said late Tuesday that it swung to a quarterly loss.
Shares of Akamai Technologies Inc. fell 1.2% after the cloud-computing service firm reported first-quarter results that fell short of its own forecast.
Starwood Hotels & Resorts Worldwide shares gained 8.3% after the company said it hired investment bank Lazard to explore strategic alternatives, a move that could put the company up for sale. The hotel operator also reported lower first-quarter earnings.
Shares of Twitter fell 8.9%, extending Tuesday's decline following the early release of the company's disappointing first-quarter results.
In Asian trading Wednesday, Indonesia's stock market took a battering for a third day as growing worries over poor company profits compounded concerns about already-stuttering economic growth.
FOREX:
The dollar tumbled toward its biggest one-day decline against the euro in more than a month, as a lackluster reading on U.S. growth sowed more doubts about the prospect of higher interest rates this year.
But the selloff was mitigated by a statement from the Federal Reserve, which attributed some of the recent softness in the U.S. economy to "transitory factors."
The greenback's broad slide--an acceleration of recent weakness--sent ripples through financial markets. The dollar's fall has been stoked by a flurry of disappointing U.S. economic indicators and stands in contrast to a sharp rally that took the buck to a 12-year high, by some measures, just last month.
The reversal reflects investors' heightened uncertainty about the timing of any interest-rate increase by the Fed. At the start of 2015, many investors and economists had pegged higher rates by midyear. Now, expectations for an increase have been pushed out to late 2015 and beyond. Higher rates make a currency more attractive for investors.
"The latest data provided affirmation to investors' fears that there'd be a long wait before they'd get satisfaction from Fed tightening," said Alan Ruskin, global head of developed-market currency strategy at Deutsche Bank. The Commerce Department said U.S. gross domestic product grew at an annualize rate of 0.2% in the first quarter, down from a rate of 2.2% in the fourth quarter and 5% in the fourth quarter.
The driving force behind the day's selling were so-called macro hedge funds and large asset managers that prefer to make wagers on events that are likely to occur within six months, Mr. Ruskin said. Also lightening dollar exposure were longer-term investors booking profits from the extended rally.
After the GDP report was released, A.G. Bisset Associates LLC, which oversees $85 million in individually managed accounts for institutional investors, boosted bets that the dollar would weaken against the euro. The asset manager's currency strategies, which are based on trading trends, forecast that the euro will rise to as high as $1.20, said Chief Executive Ulf Lindahl.
To be sure, the statement released by the Fed after its policymaking meeting offered dollar bulls some hope.
The Fed said the economic slowdown during the winter months reflected "transitory factors." The central bank also said it expected that growth would resume at a moderate pace and that inflation would rise gradually toward its 2% target.
"This statement comes in more optimistic than expected, which is positive for the dollar, given its recent moves," said Ian Gordon, currency strategist at Bank of America Merrill Lynch. "But the Fed will need to see a pickup in U.S. data to remain optimistic on their medium-term growth outlook."
Still, many investors believe a rate increase in 2016 is becoming more likely. The GDP reading follows a recent raft of soft indicators, including those for retail sales, business investment and manufacturing output.
BONDS:
Government bonds from both sides of the Atlantic sold off, sending benchmark bond yields in the U.S. and Germany to the highest levels in more than six weeks, as concerns about fixed-income valuations rose following a sharp price rally over the past year.
The selling sent government debt prices tumbling from the U.S., Germany, France, the U.K., Spain, Portugal, Italy, Sweden and Denmark.
Anxiety has been growing particularly on German government debt, the benchmark for the eurozone's debt markets. The 10-year German bond yield had tumbled to a record low near zero last week, driven by ultraloose monetary stimulus from the European Central Bank.
"The developed sovereign bond markets are priced for perfection," said Tony Crescenzi, senior market strategist at Pacific Investment Management Co. in Newport Beach, Calif., which has $1.59 trillion in assets under management.
"They are highly dependent upon persistent central bank support and now and then get subjected to more natural forces of supply and demand, as well as doubt about the sustainability of it all," said Mr. Crescenzi.
New debt sales also weighed on the bond markets. The U.S. sold $29 billion in seven-year Treasury notes on Wednesday, while Germany, Portugal and Italy also sold new bonds. U.S. companies also sold new bonds to take advantage of still-low interest rates before the Federal Reserve shifts into tightening monetary policy some time this year.
The selloff sent the yield on the benchmark 10-year Treasury note to as high as 2.08%, the highest intraday level since March 16. When bond prices fall, their yields rise.
The Treasury bond market pared a rise in the afternoon session as the Federal Reserve's latest monetary-policy statement continued to suggest caution regarding the timing to raise interest rates.
COMMODITIES:
Oil prices hit fresh 2015 highs after data showed a deceleration in the growth of U.S. crude stockpiles.
(MORE TO FOLLOW) Dow Jones Newswires
April 29, 2015 17:31 ET (21:31 GMT)
The amount of crude oil in storage in the U.S. grew by 1.9 million barrels last week to 490.1 million barrels, the U.S. Energy Information Administration said Wednesday. While inventories stand at a record high in weekly data going back to 1982, the increase was smaller than analysts had expected.
"Today's data provide more evidence that the growth in U.S. oil stocks is starting to slow, although it will still be some time before stocks actually fall," said Capital Economics in a note.
U.S. crude-oil inventories have grown for 16 straight weeks due to swelling domestic production and a global oversupply of oil that sent prices plunging in 2014.
Stockpiles in Cushing, Okla., fell for the first time in 21 weeks. Cushing supplies have risen to record highs in recent weeks, spurring concern among traders that the storage hub, which serves as the delivery point for the benchmark U.S. oil-futures contract, could hit maximum capacity. In the week ended April 24, Cushing inventories fell by 500,000 barrels to 61.7 million barrels.
However, nationwide stockpiles are still at the highest level in more than 80 years, according to EIA data.
Another closely watched metric--U.S. crude-oil production--rose by 7,000 barrels a day in the week and held near multi-decade highs. Production has fallen on a weekly basis in three of the last five weeks.
Refinery utilization rose less than expected in the week.
Gasoline stockpiles rose by 1.7 million barrels, more than analysts had expected.
In the precious metals market, gold prices extended losses after the Federal Reserve gave few indications that it would delay raising interest rates any more than previously believed.
TODAY'S HEADLINES:
Fed: Slowdown Due to Transitory Factors
Federal Reserve officials attributed the economy's sharp first quarter slowdown to transitory factors, in effect signaling an increase in short-term interest rates remains on the table for the months ahead although the timing has become more uncertain.
Baidu Posts Soft Guidance as Profit Falls
Baidu posted soft sales guidance for the current quarter, as profit fell in the latest period amid flat numbers for its online marketing customers.
U.S. GDP Expands at 0.2% Pace in 1Q
The U.S. economy slowed to a crawl at the start of the year as businesses slashed investment, exports tumbled and consumers showed signs of caution, marking a return to the uneven growth that has been a hallmark of the nearly six-year economic expansion.
Shinzo Abe Calls for Closer U.S.-Japan Ties
Japanese Prime Minister Shinzo Abe called for closer ties between the U.S. and Japan, sealed by a proposed Pacific trade pact, in an address to U.S. lawmakers deeply divided over whether to back broader trade.
Apple Warns EC Probe Could Result in Back Tax Payments
Apple warned investors for the first time that it may need to pay a "material" amount of back taxes to Ireland if a European Commission investigation finds that the country's tax policy toward companies like Apple constituted illegal state support.
Mylan Boosts Offer for Perrigo to $35.6 Billion
Mylan again increased its offer to acquire Perrigo, now to $35.6 billion, the latest move in a three-way takeover tussle in the pharmaceutical industry.
Starwood Hotels to Explore 'Strategic' Alternatives
Starwood Hotels & Resorts Worldwide has hired investment bank Lazard to "explore a full range of strategic and financial alternatives to increase shareholder value," a move that could put the company up for sale.
SEC Votes 3-2 to Propose Executive-Compensation Rules
The SEC voted 3-2 to propose rules that would force about 6,000 publicly traded companies to tell investors how the pay of top management tracked the firm's financial results.
Time Warner Beats Expectations on Growth From March Madness
Time Warner reported better-than-expected 1Q profit of $970 million and revenue growth of 4.8% to $7.13 billion as March Madness programming helped drive audience growth in its Turner segment.
Fiat Chrysler Aims to Increase Low Margins in North America
Fiat Chrysler Automobiles laid out its plan for boosting stubbornly low margins in North America, aiming to increase them to close to 6% by the end of the year.
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TODAY'S CALENDAR:
(All times GMT, followed by country and event)
2100 NZ Reserve Bank of New Zealand Official Cash Rate announcement
2245 NZ Mar Building Consents Issued
2300 SKA Mar Service Industry Activity Index
2300 SKA Mar Industrial Production Index
2350 JPN Mar Preliminary Industrial Production
0030 TAI Q1 Advance GDP
0130 AUS Q1 International Trade Price: Export
0130 AUS Mar Financial Aggregates, incl Private Sector Credit
0130 AUS Q1 International Trade Price: Import
0200 SIN Mar Bank Loans
0200 SIN Mar Money Supply
0200 SIN Q1 Employment
0200 SIN Q1 Unemployment Rate
0400 JPN Mar Auto exports
0400 JPN Mar Auto production
0401 MAL Mar PPI
0430 JPN Mar Preliminary Report on Petroleum Statistics
0500 JPN Mar Housing Starts
0500 JPN Mar Construction Orders
0600 GER Mar Retail Trade
0645 FRA Mar PPI
0630 AUS Mar International Reserves & Foreign Currency Liquidity
0700 THA Mar Industrial Production Index
0730 THA Weekly International Reserves
0815 HK Mar Money Supply
0900 MAL Mar Money Supply
0645 FRA Mar Household consumption expenditure in manufactured goods
0730 EU Apr EuroCOIN indicator of euro area economic activity
0800 ITA Mar Unemployment
0800 GER Apr Labour market statistics (incl unemployment)
0800 EU ECB Economic Bulletin
0830 UK Mar Land Registry House Price Index
0900 ITA Apr Cities CPI
0900 ITA Apr Provisional CPI
0900 EU Mar Unemployment
0900 EU Apr Flash Estimate euro area inflation
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(END) Dow Jones Newswires
April 29, 2015 17:31 ET (21:31 GMT)
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