eCommerceNews New Zealand - Technology news for digital commerce decision-makers
Story image
While you were sleeping: Greece to seek extension
Thu, 19th Feb 2015
FYI, this story is more than a year old

Wall Street moved lower amid disappointing US economic data as investors awaited the release of the minutes of the January Federal Reserve meeting for fresh clues on the timing of an interest rate increase.

Also firmly on the radar are the ongoing efforts between Greece and its international creditors to find agreement on conditions bailout the country's newly elected anti-austerity government is seeking to change. Greece's government said it will submit a request to the euro zone on Thursday to extend a "loan agreement" for up to six months, Reuters reported.

"A lot of people are focused on the Fed minutes, but that issue is kind of interwoven with the situation in Europe," David Lebovitz, global market strategist at JP Morgan Funds in New York, told Reuters. "The massive amounts of monetary stimulus that have been deployed abroad are continuing to put upward pressure on the US dollar, and I think that will make it hard for the Fed to raise rates."

In afternoon trading on Wall Street, the Dow Jones Industrial Average fell 0.25 percent, the Standard - Poor's 500 Index declined 0.30 percent, while the Nasdaq Composite Index slipped 0.15 percent. On Tuesday, the S-P 500 closed at a record high 2,100.34.

The latest US data showed factory production advanced a less-than-expected 0.2 percent last month, following a downwardly revised steady output in December.

"It's not weak, but it's not great either," Thomas Costerg, an economist at Standard Chartered Bank in New York, who correctly estimated the gain in factory output, told Bloomberg. "There are some downside risks, clearly."

Separately, housing starts slid 2.0 percent to a seasonally adjusted annual pace of 1.07 million units in January, while the producer price index for final demand dropped 0.8 percent in January, following a 0.2 percent decline in December.

"If we continue to see core prices disinflating at the current pace ... it will likely still the Fed's hand in terms of the timing of the rate hike," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters. "As much as they see the weakness as temporary, it would not be favourable for them to be tightening at a time when core inflation is moving further away from the target."

The Dow fell led by declines shares in Exxon Mobil and those of Chevron, down 2 percent and 1.5 percent respectively.

Exxon Mobil shares fell after a SEC filing on Tuesday showed Warren Buffett's Berkshire Hathaway sold its entire stake in the company in the final quarter of 2014.

Also weighing on Exxon Mobil and Chevron was a slide in oil prices, with crude oil down 2.2 percent.

In Europe, the Stoxx Europe 600 Index ended the session with a 0.9 percent gain from the previous close. The FTSE 100 Index closed flat. Germany's DAX climbed 0.6 percent, while France's CAC 40 Index rose 1 percent.

Greece's Athens Stock Exchange General Index rose 1.1 percent.