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With Economy Teetering, Trade Deficit Widens

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On Wednesday the Commerce Department announced that exports fell in June, while imports increased, leading to a higher than expected trade deficit of just under 50 billion dollars. In May the trade deficit was 42 billion, and analysts had been expecting a similar number for June.

The falling export numbers could point to a weakening economic recovery in the US, a sentiment echoed by yesterday's gloomier outlook from the Federal Reserve. The Fed announced it would start reinvesting proceeds from mortgage bonds it bought during the height of the financial crisis, into government debt, aiming to keep interest rates low.

The various negative economic data was causing investors to hit the sell button on Wednesday, with the SPDR Dow Jones Industrial Average ETF falling more than 2%, the SPDR S&P 500 ETF down more than 2.5%, and stocks on the NASDAQ falling hardest, with the PowerShares QQQ ETF down almost 3% on the day so far.

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