While you were sleeping: US consumer confidence drops
Oct. 1 (BusinessDesk) - Wall Street slid after a report showed a surprise decline in US consumer confidence, while other data showed disappointing home prices and business conditions in the Midwest.
The Conference Board’s index of consumer attitudes dropped to 86.0 in September, down from an upwardly revised 93.4 in August.
"We're continuing to effectively struggle," Mike Englund, chief economist at Action Economics in Boulder, Colorado, told Reuters. "Some of the optimism that we got in the updraft in consumer confidence in the third quarter was probably a bit overstated."
Separately, the S&P/Case Shiller composite index of home prices in 20 metropolitan areas rose a less-than-expected 6.7 percent in the 12 months ended in July, while the Institute for Supply Management-Chicago business barometer fell more than expected to 60.5 this month, down from 64.3 in August.
In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.23 percent, the Standard & Poor’s 500 Index declined 0.22 percent and the Nasdaq Composite Index gave up 0.16 percent.
Declines in shares of Chevron and those of Home Depot, down 1.5 percent and 1.2 percent respectively, led the Dow lower.
Shares of Chevron fell with oil prices amid expectations that ample supply will outstrip demand.
“We are going to continue to see lower prices as we go forward,” Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors, told Bloomberg News. “Fundamentally we are just very well supplied. The [US] dollar continues to get stronger and it’s adding pressure to oil.”
Supply from the Organization of the Petroleum Exporting Countries averaged 30.96 million barrels per day in September, up from 30.15 million barrels per day in August, according to a Reuters survey based on shipping data and information from sources at oil companies, OPEC and consultants.
Meanwhile, shares of eBay jumped, last up 7.7 percent, after the company said it plans to spin off its PayPal unit.
"A thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively,” eBay CEO John Donahoe said in a statement.
In Europe, the Stoxx 600 finished the day with a 0.6 percent gain from the previous close, as did Germany’s DAX. France’s CAC 40 rallied 1.3 percent. The UK’s FTSE 100 Index fell 0.4 percent.
As European Central Bank policy makers get ready to meet on Thursday, a report showed that consumer prices in the euro region rose an annual 0.3 percent in September, the lowest level in five years. The euro fell as low as US$1.2571, the weakest since September 2012.
“This week we’ll look for more details regarding the asset-backed securities program and covered bond program,” Teis Knuthsen, chief investment officer at Saxo Bank’s private-banking unit, told Bloomberg News. “We’re still waiting for the big bazooka, which would be the ECB really expanding their balance sheet.”