U.S. stocks and exchange traded funds (ETFs) fluctuated in morning trading as investors waited on earnings reports, a mixed economic outlook from the International Monetary Fund and falling commodity prices.
The IMF released disappointing news stating that it expects the world economy to shrink by 1.4% in 2009, slightly worse than the 1.3% in anticipated earlier in the year. On the positive side, it boosted its economic outlook for 2010, pegging economic growth at 2.5%, up from the 1.9% it estimated in April.
Leaders of the G-8 began a three-day meeting in Italy to discuss some major issues. First on the table was the economy. All leaders agreed that the global economy is too unstable to begin rolling back massive fiscal stimulus plans in the near future, but are all committing to preparing exit strategies, which will vary from country to country. Additionally, the leaders spoke about global warming and climate control. They failed to come to an agreement to keep the globe’s average temperature rise under two degrees Celsius (or 3.6 degrees Fahrenheit), reports the Associated Press.
Commodity prices continue to fall, led by crude oil, which fell below $62/barrel. An OPEC report that indicated that it took years for the demand of crude oil to recover from the financial crisis in conjunction with a statement from the CFTC stating that it was considering tougher position limits to try to curb speculation added to bearish sentiment of black gold. The United States Oil Fund (USO) was down 2.9% in morning trading.
Today kicks off earnings season and many nervous investors are waiting to hear from aluminum maker Alcoa (AA) after the closing bell. Many believe that this earnings release will set the tone and direction for the second quarter. To see what Alcoa reports and to follow other earnings reports, visit the earnings calendar.
Overall, all three major U.S. indexes were down in morning trading. The Dow Jones Industrial Average dropped by 0.5%, the S&P 500 is down 0.8% and the Nasdaq has dropped nearly 0.7%.
For more stories on oil, visit our oil category.
Kevin Grewal contributed to this article.