Forexpros – U.S. stocks closed down Monday, as disappointing U.S. retail sales data fueled fresh concerns over the strength of the country’s economic recovery.
Market participants also looked ahead to Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the U.S. Congress on Tuesday and Wednesday, amid ongoing speculation over whether the central bank will introduce more easing measures to stimulate the economy.
At the close of U.S. trade, the Dow Jones Industrial Average dropped 0.39%, the S&P 500 index fell 0.23% while the Nasdaq Composite gave back 0.40%.
The Commerce Department reported earlier that retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation for another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke’s testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
Minutes of the Fed’s June policy-setting meeting released last week revealed that only a few board members thought that more asset purchases would be necessary.
Several other officials indicated that more action could be warranted only if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
In earnings news, Citibank shares jumped 2% after reporting quarterly earnings and revenue that beat Wall Street’s expectations.
Shares in media holdings company Gannett surged 5.5% after the company reported revenue of USD1.31 billion in the second quarter, broadly in line with expectations for sales of USD1.32 billion.
In deal news, Par Pharmaceutical rallied 38% after it agreed to be acquired by private equity firm TPG for approximately USD1.9 billion.
Also Monday, The Federal Reserve Bank of New York said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0
Across the Atlantic, European stock markets were lower, as a combination of ongoing concerns over rising borrowing costs for peripheral euro zone nations and fears over the health of the global economy continued to weigh on market sentiment.
During European afternoon trade, the EURO STOXX 50 declined 0.32%, France’s CAC 40 gave back 0.03%, while Germany’s DAX 30 fought the downtrend climbing 0.13%%.
Chinese Premier Wen Jiabao warned over the weekend that China’s economy has not yet entered a recovery and “difficulties may continue for some time.”
He added that that policy makers were likely to introduce measures to boost growth in the second half of the year, according to the state-run Xinhua News Agency.
The comments followed government data released Friday showing China’s second quarter economic growth slowed to 7.6% from a year earlier, compared to 8.1% in the first quarter.
Markets are awaiting Ben Bernanke’s testimony, U.S. CPI and the European ZEW sentiment numbers on Tuesday.
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