The US markets closed lower on Wednesday, for a second straight session as a withering decline among last year’s most-prominent stock performers helped to unsettle Wall Street sentiment. Investors were also looking at the geopolitical front, where China confirmed a visit from North Korean leader Kim Jong Un, and reportedly told Chinese President Xi Jinping that the country was committed to denuclearizing the Korean Peninsula.
On the economy front, the pace of growth in the economy in the fourth quarter of 2017 was boosted to 2.9% from 2.5%, reflecting the biggest increase in consumer spending in three years and higher investment in business inventories. The US fell just short of a closely watched 3% growth marker after racking up gains of 3.2% in the 2017 third quarter and 3.1% in the second quarter. It would have been the first time since 2004-2005 that the economy expanded 3% in three straight quarters. Corporate earnings in the fourth quarter were effectively flat. The economy got a big lift from consumer spending at the end of the year and businesses also increased investment. In the government’s latest GDP update, consumer spending was revised to show a 4% increase instead of 3.8%. That’s the largest gain since the end of 2014.
Meanwhile, an early look at trade patterns in February showed a 0.1% widening in the US goods deficit - to $75.4 billion from $75.3 billion. Also, the government’s advanced report on wholesale inventories found a 1.1% increase in February. And advanced retail inventories rose 0.4%. Both imports and exports increased in February, with imports rising at a slightly faster pace. The widening of the deficit in goods points to a larger US trade deficit in February. Inventories, for their part, increased in a sign that companies are replenishing stocks after strong sales in the fourth quarter.
The Dow Jones Industrial Average lost 9.29 points or 0.04 percent to 23,848.42, the Nasdaq dropped 59.58 points or 0.85 percent to 6,949.23, while the S&P 500 was down by 7.62 points or 0.29 percent to 2,605.00.
