Shares pares losses on Wall Street

US shares have regained most of their earlier losses, but the Dow and S&P are still on track for their worst weekly performance of 2013.

The Dow was down just 0.07% or 10 points at 15,102 with under half an hour to go to the close in New York, while the S&P 500 was down 0.18% at 1658.4. The NASDAQ 100 ventured into positive territory, gaining 0.08% to 3079.8.

We’re at an interesting juncture with the US economy, with solid signs of improvement in the labour market, along with indications that the housing recovery remains healthy in spite of rising rates, but apparently little of this translating into retail spending. Today’s low consumer sentiment reading agrees with the downbeat reports we’ve heard from various retailers in recent weeks.

The market hasn’t responded strongly to any of today’s economic data, suggesting market participants don’t interpret the figures as having any strong bearing on the Fed’s decision to taper or not, but I think the FOMC will be paying close attention to what has been going on.

Although the Fed has explicitly stated the labour market as being an area of focus for them, and that area of the economy has definitely been improving, their ultimate aim is for GDP growth. The US economy is so driven by consumers that softening in this area will be a big drag on GDP and this will be a concern for the Fed.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.