US markets fall on profit booking, ignore economic data

By Gautam Broker, Research Analyst at CNBC-TV18

The US equity markets saw profit booking and neglected positive economic data on Tuesday.

Caterpillar tanked over 4 percent after the company cut profit forecast, which was the biggest drag on Dow Jones.

Apple saw profit booking post iPhone 5 euphoria, falling nearly 2.5 percent.

Federal Reserve Bank of Philadelphia President Charles Plosser says QE3 is unlikely to spur employment growth.

It was a remarkable improvement in US consumer confidence for September, which came in at 70.3 as against 61.3 in previous month and expectation of 64.8.

Richmond Fed Index for September rose 4 from minus 9 MoM and expectation of minus 4.

Uncertainty continued over Spain bailout. Riots over austerity stoke worries yesterday.

Spain will announce further austerity measures for 2013 tomorrow. 

German press reports say ECB and German central bank are getting bond buying program legally verified.

US markets at close: Dow Jones fell 0.75 percent to 13,457.6 and S&P lost 1.05 percent to 1,441.6 while Nasdaq Composite was down 1.4 percent S&P 500 Index saw worst one day cut since late June.

European markets at close: DAX, CAC and FTSE were up 0.2-0.5 percent; Spain and Italy gained 0.4-0.5 percent.

Today SGX Nifty was down 0.4 percent at 5653.

Currencies

Euro hit a low of 1.2886 against the US dollar yesterday, but recovered today morning to above 1.29 a dollar.

Dollar index was stronger at around 79.7 after Plosser comments.

Yen hit a high of 77.6 against the US dollar yesterday, which was marginal weaker today.

Australian dollar was down to 1.036 to the dollar as against 1.04 levels yesterday.

Commodities

Commodities were in a consolidation mode.

Brent crude hit an intraday high of USD 111.5 a barrel but rose 0.5% to close at USD 110.5 a barrel.

WTI crude fell 0.6% to USD 91.4 a barrel after seeing a high of USD 93.2 a barrel yesterday.

Gold was down 0.2% to close at USD 1760 an ounce.

US data was supportive for base metals; LME Copper rallied 1.1%

Commodities were down 0.3-0.5% today morning

What to watch out for

German CPI

US New Home Sales

US Mortgage Applications

EIA Inventory Report