Here’s Why Wednesday’s Markets Disappointed Investors

The major American stock indices got off to a bad start on Wednesday.

Europe provided more disappointing economic data, although for the first time this week, the bad news was peppered with earnings disappointments. As a result, some of the European stock indices finished the day in the red (NYSEARCA:VGK).

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Before the opening bell, domestic earnings reports were mixed. Macy’s (NYSE:M) beat its number and advanced by 3 percent at mid-day. Dish Network (NASDAQ:DISH) and Carlyle Group (NYSE:CG) were not so lucky.

Dallas Federal Reserve President Richard Fisher threw a bucket of cold water on the hopes for a third round of quantitative easing and the major stock indices were in the red at the sound of the opening bell.

In Europe, Germany’s Federal Statistics Office (Destatis) reported that its index of production industries decreased by 0.9% in June 2012 compared with May. Destatis also reported that after calendar and seasonal adjustment, Germany’s exports decreased by 1.5% and imports fell by 3.0% compared with May 2012 (NYSEARCA:EWG).

The Bank of England released a gloomy inflation report on Wednesday. The outlook for British GDP growth was described as “unusually uncertain” (NYSEARCA:EWU).

Although the FTSE 100 Index advanced 0.08%, the Euro STOXX 50 Index finished Wednesday’s session with a 0.33 percent decline.

European ETFs had a bad day on Wednesday. The iShares Germany Index (NYSEARCA:EWG) declined by 0.43 percent. The iShares Spain Index (NYSEARCA:EWP) sank 0.81 percent. The iShares Italy Index (NYSEARCA:EWI) fell 0.26 percent.

As of 5:11 EDT, the euro declined 0.02% against the dollar, trading at $1.2362 (NYSEARCA:FXE).

Spain’s ten-year bond yield climbed as high as 6.94 percent on Wednesday from Tuesday’s closing level of 6.84 percent (NYSEARCA:EWP).

Italy’s ten-year bond yield climbed as high as 6.05 percent on Wednesday from Tuesday’s closing level of 6.01 percent (NYSEARCA:EWI).

On London’s ICE Futures Europe Exchange, September futures for Brent Crude Oil advanced by 3 cents (0.03%) to $110.40/bbl. (NYSEARCA:USO).

August gold futures advanced by $2.40 (0.15%) to $1,612.10 per ounce (NYSEARCA:GLD).

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At the closing bell, the Dow picked up 7 points to reach 13,175 for a gain of 0.05 percent. The S&P 500 achieved a 0.06 percent gain for the day, closing at 1,402 (NYSEARCA:SPY). The Nasdaq declined by 0.15 percent to finish at 3,011 (NASDAQ:QQQ) and the Russell 2000 matched that loss to finish the day at 800 (NYSEARCA:IWM).

Thursday brings us the weekly report on initial unemployment claims, as well as two reports from the Census Bureau: the Trade Balance report and the Wholesale Trade – Sales and Inventories report for June.

Bottom line: The major American stock indices struggled amid mixed earnings reports on Wednesday, as concerns increased that disappointing economic data in Europe could impact domestic stocks as European stocks begin to feel some pain.

John Nyaradi is the author of The ETF Investing Premium Newsletter.