Equity markets declined on a combination of worse than expected economic news released in the US. The Beige Book Report, released by the Federal Reserve, showed that the US economy is sluggish and slow steady growth is expected. The S&P 500 Index declined by 7 points to 1106Durable-goods orders fell by 1% to a seasonally adjusted $190.5 billion, the Commerce Department said Wednesday. Economists surveyed expected a 1.1% gain. A durable good is designed to last at least three years, such as a car. Year to date, durables are up 16.5%, in unadjusted terms, from the same six-month period in 2009. Overall durables in May fell 0.8%; previously durables for that month were seen down 0.6%. June’s report suggested flat demand for durables in the future, with unfilled manufacturers’ orders were unchanged. Durable-goods shipments of manufacturers dropped 0.3% last month. Inventories rose 0.9%. Orders for transportation-related goods decreased 2.4%, pushed down by civilian aircraft. Car demand rose. Outside of the transportation sector, orders for all other durables decreased by 0.6% in June. Fabricated metals, electrical equipment, and communications equipment rose, but machinery and primary metals fell. June capital goods orders fell 2.3%. Non-defense capital goods, items meant to last 10 years or longer, dropped 1.6%. Defense-related capital goods orders fell by 6.8%. Excluding defense, all other durables decreased 0.7% in June.
A worse than expected energy inventory number pushed oil prices lower for the trading session. According to the Department of Energy, Crude oil inventories rose by 7.3 million barrels, compared to an expected decrease of 1.4 million barrels. Demand increased slightly on a year over year basis, which kept oil from slipping more than 75 cents per barrel.
Germany’s export surge has placed it to the fore of the euro-zone’s recovery to the delight of the ruling coalition, although ordinary Germans seem still to be mindful of the global economic uncertainties surrounding the second half of the year. The Berlin-based DIW economic research institute estimated Wednesday that Germany has posted the highest growth in the second quarter in the 16-member euro zone, powering ahead by 1.1% from the previous quarter. The institute’s index is based on industrial production, sales and other data to compose an estimate for gross domestic product. The German government isn’t scheduled to issue official GDP data for the past quarter until Aug. 13.