U.S. stocks ended slightly lower for the second consecutive day and for the fourth day out of the last five as early-session gains were erased after the release of negative economic data and the short-lived oil rally thinned-out. The latest Chinese factory measure has highlighted many of the concerns regarding a global economic slowdown. The Caixin Manufacturing Purchasing Managers’ Index fell to its lowest level since the financial crisis and missed forecasts by a large margin. Additionally, economic data from the Eurozone has also missed the mark, showing a slower-than-expected recovery in the region’s manufacturing sector.
The Dow Jones Industrial Average declined 50.58 points, or 0.3%, to trade at 16,279.89. The blue-chip index rose slightly in early session hours but quickly erased gains and declined nearly 118 points to close in the red. The S&P 500 index fell 3.98 points, or 0.2%, to close the day at 1,938.76. The S&P 500 index lost 3.98 points, or 0.1%, to trade at 4,752.74, as the index’s energy sector notched marked declines. Crude oil prices fell 4.1% to $44.48 a barrel, weighing down on major components such as Chevron Corp. (NYSE:CVX), which has declined 1.5%. The Dow Jones has declined nearly 3% since last Wednesday, prior to the Federal Reserve’s decision to keep interest at their current level. The Fed’s decision not to raise interest rates was backed by concerns over global economic growth, a scenario that would likely see reduced profits from large, multinational corporations that make up major benchmarks.
In currencies, the euro was lifted by comments made by European Central Bank President Mario Draghi regarding continued deliberations on whether to further expand the central bank’s quantitative easing program. The euro rose to $1.1182 after touching a three-week low of $1.1105 yesterday. The prospect of higher U.S. interest rates and soft growth in China continue to cause concerns on many emerging markets. Brazil’s real tumbled to a record low of 4.179 real per dollar as the country deals with a recession, deficit, and political instability as a result of corruption charges. The Australian dollar, which is often used in China-related trades, is hovering near a two-week low of $0.6989 as demand for the currency falls on China concerns. The Japanese yen has been trading within a narrow range for the past week, remaining steady around 119 yen on the dollar.
The German IFO business climate index will be released today, offering some insight into the business situation in Europe’s largest economy. However, most eyes are set on tomorrow’s major data releases. The Bank of Japan will announce its interest rate decision earlier in the session, followed by U.S. GDP data.