Forexpros – U.S. stocks opened lower on Wednesday, but sustained hopes for further action by the Federal Reserve and the European Central Bank to stimulate growth continued to support market sentiment.
During early U.S. trade, the Dow Jones Industrial Average fell 0.18%, the S&P 500 index dropped 0.23%, while the Nasdaq Composite index declined 0.27%.
A Federal Reserve official on Tuesday kept alive hopes for central bank intervention by saying the Fed should launch an aggressive bond-buying program to aid the economy until unemployment begins to fall.
Meanwhile, markets were eyeing the ECB amid expectations the bank will soon take steps to help lower Spanish and Italian borrowing costs, after bank head Mario Draghi indicated last week that the ECB may restart its bond buying program.
The ECB said action would be conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
Financial stocks were broadly lower, led by Goldman Sachs, down 0.74%, while Citigroup and JP Morgan declined 0.38% and 0.22% respectively.
Shares in Morgan Stanley also retreated 0.21% amid reports the bank may be under pressure to close its brokerage offices and lay off supporting staff.
Also on the downside, McDonald’s tumbled 2.57%, after the fast food giant posted flat same-store sales in July, mostly hurt by the debt crisis in the euro zone, disappointing market expectations.
Among earnings, Disney edged down 0.06% after saying it posted earnings that beat expectations, but revenue was lighter than expected.
Priceline saw shares dive 14.24% after the online travel company handed in a disappointing guidance for the current quarter and after at least 11 analysts lowered their price targets on the firm.
On the upside, Hewlett-Packard rallied 3.69% after the tech giant raised its third-quarter earnings guidance above analysts’ estimates.
Other stocks in focus included NewsCorp, scheduled to post earnings after the closing bell.
Across the Atlantic, European stock markets were lower. The EURO STOXX 50 dropped 0.87%, France’s CAC 40 declined 0.76%, Germany’s DAX retreated 0.56%, while Britain’s FTSE 100 fell 0.41%.
During the Asian trading session, Hong Kong’s Hang Seng Index eased 0.04%, while Japan’s Nikkei 225 Index climbed 0.88%.
Also Wednesday, preliminary data showed that nonfarm productivity in the U.S. rose 1.6% in the second quarter, beating expectations for a 1.3% increase and following a 0.5% fall the previous quarter.
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