Dow Slides by Over 100 Points

Tuesday saw the release of a slew of tepid macroeconomic data points that further dented investor sentiment. The US trade gap grew more than estimated in October, roaring to a nine-month high as higher oil prices inflated the import bill. Figures published by the Commerce Department showed that the trade shortfall widened 8.60% to -$48.70 billion compared to an upwardly revised -$44.90 billion gap reported in September. Economists surveyed by Reuters had anticipated the deficit ballooning to -$47.50 billion. Separate numbers from the Institute of Supply Management displayed a deceleration in the US services sector. The ISM’s widely-followed Non-Manufacturing Purchasing Managers’ Index declined to 57.4 in November from the 60.1 reported in October, printing below analyst forecasts anticipating a drop to 59.0 last month. Dow futures fell more than -100 points to close Tuesday at 24180, with losses extended overnight as the index edges down to near 24100.

The Australian economy expanded at a slower than expected pace in the three months to September, with weakness in consumer spending casting a shadow over the growth outlook. Figures released by the Australian Bureau of Statistics on Wednesday showed the country’s gross domestic product increased 0.60% in the third quarter from the 0.90% rate recorded a quarter prior. Economic momentum came in below the consensus forecast of 0.70% growth, with the annualized pace of 2.80% also lagging market projection for 3.00% growth. The result could surprise policymakers at the Reserve Bank of Australia, who decided on Tuesday left interest rates unchanged at 1.50% in anticipation of faster growth. Household consumption was viewed as especially weak after rising a mere 0.20% during the three-month period, underscoring the smallest gain since late 2012. The Australian dollar weakened sharply against the greenback following the release of GDP data, sending AUDUSD slipping -0.40% to 0.7580.