(menafn – ecpulse)
U.S Stocks plunged on closing Tuesday, following a governmental report showed the economy grew below forecast in the third quarter, overshadoweding a glimmer of optimism as the Standard & Poor’s and Moody’s affirmed its credit rating on the U.S and Federal Reserve discussions over additional stimulus.
Investors were disappointed as the session began on Tuesday, after a second reading from the U.S Department of Commerce showed this morning that the U.S economy grew a mild 2.0 percent in the third quarter this year, after expanding 2.5 percent previously. Markets expected the second reading to show the economy grew 2.5 percent for the second reading in a row.
On the Other hand, the Federal Open Market Committee released the minutes of their latest meeting today, where the minutes showed that some Federal Reserve policy makers discussed the possibility the Central Bank should consider more easing.
The minutes clarified that most members in the Fed believes the economic outlook might warrant additional policy accommodation, but the Fed remarked that such accommodation is more likely to be beneficial if it were provided in "the context of future communications initiative".
Stocks rose by midday on Tuesday, after the international Monetary said it overhauled its credit line program to encourage countries vulnerable to foreign shocks to turn to the fund as European leaders struggle to halt the unending debt crisis.
The IMF reassured it will continue to offer its flexible credit line, paving a new exit for countries currently facing short-term liquidity needs, and particularly, countries that are dangerously exposed to Europe's woes, increasing hopes that EU leaders may be having more options in hand to tackle their debt crisis.
But optimism couldn’t help find a way through the stressed markets early Tuesday, after Standard & Poor’s and Moody’s Investors Services said they won’t cut rating on the U.S, although the U.S supercommittee that was supposed to craft a 1.2 trillion of deficit cuts failed to reach an agreement.
Accordingly, the Dow Jones Industrial Average index shed 53.59 points or 0.46% to close at 11493.72 levels, the index reached the highest point at 11571.75 and the lowest point at 11433.97, By closing 8 shares inclined while 22 shares declined.
The Standard & Poor’s 500 Index lost 4.49 points or 0.41% to close at 1188.04 levels, the index reached the highest point at 1196.81 and the lowest point at 1181.65, By closing 145 shares inclined while 353 shares declined and 2 shares remained unchanged.
The NASDAQ Composite Index declined 1.86 points or 0.07% to close at 2521.28 levels, the index reached the highest point at 2534.40 and the lowest point at 2499.19, By closing 790 shares inclined while 1538 shares declined and 256 shares remained unchanged.
Leading gains in the industrials shares were the Chevron Corp and International Business Machines Coro, rising 0.79 percent and 0.15 percnet respectively, Alcoa Inc plunged 0.11 percent, while Boeing fell 0.48 percent, leading losses among companies most-sensitive to the economic growth.
Brocade Communications Systems Inc gained 13.17 percent, after the company announced fourth-quarter profits that trumped analysts’ average estimates. Hewlett-Packard Co slid 2.14 percent, after forecasting profits below estimates, while Medtronic Inc added 4.45 percent, after beating forecasts with strong second-quarter earnings.
Furthermore, Netflix Inc slumped 5.40 percent after the company agreed to sell 400 million in stocks to maintain liquidity. Signet Jewelers Ltd rose 2.26 percent after posting third-quarter profits that exceeded analyst’s median estimates.
The Dollar index which measures the performance of the U.S. dollar against a basket of currencies including the Euro, the Pound, and the Yen, fell from today's opening level of 78.41 to currently trade at 78.26 recording its highest level at 78.44 and its lowest at 77.98.
Gold prices surged to reach 1699.84 since the opening level of 1677.51. Oil hiked as well to reach 97.87 after opening at 96.94 per barrel.