Forexpros – U.S. stocks opened lower on Wednesday, as investors remained cautious ahead of the minutes of the Federal Reserve’s most recent policy-setting meeting, while concerns over the handling of the euro zone’s debt crisis continued to weigh.
During early U.S. trade, the Dow Jones Industrial Average fell 0.34%, the S&P 500 index edged down 0.15% while the Nasdaq Composite index dropped 0.53%.
Market sentiment remained vulnerable after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone’s bailout fund, the European Stability Mechanism, is compatible with German law.
Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners. Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
In the U.S., official data showed earlier that the trade deficit narrowed to USD48.7 billion in May from deficit of USD50.6 billion in April, whose figure was revised from a deficit of USD50.1 billion. Analysts had expected the U.S. trade deficit to narrow to USD48.5 billion.
In company news, Goldcorp saw shares dive 9.63% after the gold producer cut its full year guidance for production levels. The company cited reduced output at mines in Ontario and in Mexico.
Meanwhile, Yahoo edged down 0.06% as the search for the Internet company’s new CEO continued. Interim CEO Ross Levinsohn was said to be the leading candidate for the job.
In the tech sector, Applied Materials saw shares dropp 0.93% after the chip-equipment maker said on Tuesday that it expects to miss its full-year estimates and its third-quarter results will be at the low end of its previous outlook.
On the upside, Research In Motion jumped 1.86%, a day after the BlackBerry maker’s shareholders elected the company’s slate of directors at its annual meeting.
Elsewhere, financial stocks were mixed. Shares in Citigroup climbed 1.31% and JP Morgan advanced 0.85%, while Bank of America rose 0.13% and Goldman Sachs eased 0.04%.
HSBC Holdings surged 1.01% after Bloomberg reported that the bank was to apologize at a July 17 U.S. Senate hearing for anti-money laundering controls that weren’t effective enough.
Europe’s largest bank was to be questioned by U.S. lawmakers about two weeks after a record fine was levied against Barclays for rigging interest rates and its ex-CEO Robert Diamond testified in the U.K.
Other stocks in focus included Marriott and Texas Instruments, both slated to release second quarter earnings after the closing bell.
Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 eased up 0.03%, France’s CAC 40 dropped 0.69%, Germany’s DAX fell 0.11%, while Britain’s FTSE 100 declined 0.46%.
During the Asian trading session, Hong Kong’s Hang Seng Index eased down 0.3%, while Japan’s Nikkei 225 Index shed 0.2%.
Later in the day, the U.S. was to release official data on crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.
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