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While you were sleeping: US durable goods orders drop

Stocks on Wall Street and in Europe slid after an unexpected drop in US durable goods orders bolstered concern about the strong greenback and its impact on corporate earnings.

A Commerce Department report showed orders for US durable goods unexpectedly fell in February, dropping 1.4 percent. January's increase was revised lower to 2 percent.

"Today's report provides strong evidence that the manufacturing sector is feeling some considerable heat from the stronger dollar," Anthony Karydakis, chief economic strategist at Miller Tabak in New York, told Reuters.

Those headwinds will continue to weigh on US manufacturers in the months ahead.

"While we may see improvement in durable orders over the next several months, robust growth is not in the cards given the global economic situation," Jay Morelock, an economist at FTN Financial in New York, told Reuters. "Weak foreign demand, tough competition from cheaper imports and lower commodity prices will continue to weigh on domestic manufacturers in the foreseeable future."

In afternoon trading on Wall Street, the Dow Jones Industrial Average dropped 1 percent, while the Standard & Poor's 500 Index slid 0.9 percent, and the Nasdaq Composite Index sank 1.7 percent.

Declines in shares of Microsoft and those of Intel, down 2.7 percent and 2.3 percent respectively, propelled the Dow lower.

Shares of Chevron and Exxon Mobil posted the biggest percentage gains in the Dow, last up 1.4 percent and 0.8 percent respectively.

Oil prices gained, with West Texas Intermediate oil for May delivery gaining 2.7 percent to US$48.77 a barrel, while Brent for May settlement added 2.4 percent to US$56.43 a barrel

To be sure, oil hasn't yet found a floor. "Production might level off or even decline a bit but remain at a very high level," Kyle Cooper, director of commodities research at IAF Advisors in Houston, told Bloomberg. "The fundamentals still look really bad and I think we'll resume the move lower."

In Europe, the Stoxx 600 Index finished the session with a 1.1 percent slide from the previous close. The UK's FTSE 100 Index declined 0.4 percent, Germany's DAX fell 1.2 percent, while France's CAC 40 Index retreated 1.3 percent.

Even so, there was better-than-expected data from Germany as the Ifo institute's business climate index rose to 107.9 in March, up from 106.8 the prior month and advancing for a fifth straight month.

There was some good news for cash-crunched Greece too.

The European Central Bank approved a slight increase in the emergency funds available to Greek lenders, Bloomberg reported, citing two people familiar with the decision. On Wednesday Greek markets were closed for a holiday.