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U.S. stocks open lower on Fed taper speculation; Dow Jones down 0.29%

Published 12/04/2013, 09:44 AM
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Investing.com - U.S. stocks opened lower on Wednesday, as upbeat U.S. employment data strengthened expectations that the Federal Reserve will begin tapering its stimulus program in the coming months.

During early U.S. trade, the Dow Jones Industrial Average slipped 0.29%, the S&P 500 index shed 0.35%, while the Nasdaq Composite index fell 0.26%.

Data showed that U.S. non-farm private employment rose at the strongest pace in nine months in November, fuelling optimism over the U.S. labor market.

Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 215,000 last month, blowing past expectations for an increase of 173,000. The previous month’s figure was revised up to a gain of 184,000 from a previously reported increase of 130,000.

A separate report showed that the U.S. trade deficit narrowed to a seasonally adjusted USD40.6 billion in October, from a deficit of USD43.0 billion in September, whose figure was revised from a previously reported deficit of USD41.8 billion.

Analysts had expected the U.S. trade deficit to narrow to USD40 billion in October.

J.C. Penney saw shares plunge 2.87%, even after the retailer said sales at stores open at least a year rose 10%.

Financial stocks added to losses after the European Commission imposed a EUR1.71 billion fine on some of the world's largest banks for interest rate-rigging by traders.

The banks to be fined are Citigroup, Deutsche Bank, Royal Bank of Scotland, JPMorgan Chase and Societe Generale. Citigroup and JPMorgan shares tumbled 1.67% and 0.70% respectively at the open of the U.S. trading session.

In the tech sector, Microsoft slipped 0.16%, although the company said it is selling every Xbox One player it can make, after introducing the new game console on November 22.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 tumbled 1.26%, France’s CAC 40 retreated 0.94%, Germany's DAX lost 1.11%, while Britain's FTSE 100 declined 0.51%.

During the Asian trading session, Hong Kong's Hang Seng Index declined 0.76%, while Japan’s Nikkei 225 Index plummeted 2.17%.

Later in the day, the Institute of Supply Management was to release its services PMI.


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