The major averages ended higher thanks in part to a late day decline in the US dollar. Volume, an important indicator of institutional sponsorship, was lower than Tuesday’s levels on both major exchanges which signaled that large institutions were not aggressively buying stocks. It was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and on the Nasdaq exchange.
Tepid Economic Data Weighed On Stocks
Stocks were under pressure for most of the session after disconcerting economic data was released from Europe and Asia. In Asia, Japan’s government said that the world’s second largest economy grew at a +1.3% annualized rate last quarter. Not only was this way below estimates but it fell short of the +4.8% initial rate reported last month. The sharp downward revision caught nearly everyone off guard and sparked concern that a double dip recession may actually occur. In Europe, Standard & Poor’s lowered Spain’s credit outlook to “negative” and said they were concerned with the country’s slow economy and massive deficit spending. This occurred one day after a separate rating agency downgraded Greece’s credit rating. Stocks in Greece plunged this week as investors scramble to move into “safer” assets.