While you were sleeping: Focus back on Yellen

While you were sleeping: Focus back on Yellen

Sept. 24 (BusinessDesk) - Wall Street moved lower with commodity prices including crude as investors looked to Thursday’s speech by US Federal Reserve Chair Janet Yellen for clarity about policy makers’ take on the economic outlook at home and abroad.

Oil dropped, with US crude down more than 4 percent, after a private manufacturing gauge in China slid to the lowest level since March 1999, while US reports showing a drop in inventories failed to stem concern about a glut.

In New York trading at about 3pm, the Dow Jones industrial average fell 0.3 percent, the Standard & Poor’s 500 Index declined 0.2 percent, while the Nasdaq Composite Index slipped 0.1 percent.

Declines in shares of United Technologies and those of Caterpillar, last down 2 percent and 1.8 percent respectively, led the Dow lower.

Eyes are on Yellen who is set to speak on Thursday, a week after the central bank held off on raising its benchmark interest rate, citing concern about the global economy.

“People are hoping that she’ll make some further comments that will take away some of the confusion and uncertainty that her comments from last week made,” Matt Maley, an equity strategist at Miller Tabak & Co in New York, told Bloomberg.

A Markit report showed its preliminary US manufacturing purchasing managers' Index for September held steady from the previous month at 53, the lowest level since October 2013.

"However, the survey is indicating the weakest manufacturing growth for almost two years, meaning the sector will have acted as a drag on the economy in the third quarter," Chris Williamson, Markit’s chief economist, said in a statement. "As such, GDP growth is likely to have slowed from 3.7 percent in the second quarter to 2.5 percent at best in the three months to September."

In Europe, the Stoxx 600 Index finished the session with a 0.1 percent increase from the previous close. France’s CAC 40 Index added 0.1 percent, while Germany’s DAX Index gained 0.4 percent, and the UK’s FTSE 100 Index climbed 1.6 percent.

European Central Bank President Mario Draghi, in testimony to the European Parliament’s Economic and Monetary Affairs Committee in Brussels, pointed to a “more challenging” macroeconomic environment.

“Over the summer, industrial production and other indicators of economic activity showed signs of resilience,” Draghi said. “At the same time, the macroeconomic environment has become more challenging.”

“More time is needed to determine in particular whether the loss of growth momentum in emerging markets is of a temporary or permanent nature and to assess the driving forces behind the drop in the international price of commodities and behind the recent episodes of severe financial turbulence,” Draghi noted.

Shares of Volkswagen, battered in the past two days, jumped 6.6 percent after Chief Executive Officer Martin Winterkorn resigned following revelations that the car maker installed software in about 11 million of its diesel-powered models that allowed them to falsely pass emissions tests.

“He had little choice,” Erik Gordon, a business professor at the University of Michigan, told Bloomberg. “The company’s reputation is in tatters.”

(BusinessDesk)

© Scoop Media