Stock Market News For Feb 22, 2019
Wall Street closed sharply lower on Thursday as several economic reports from the United States, Eurozone and Japan raised investors’ concerns about an impending global economic slowdown. Additionally,despite progress in the trade related conflict between the United States and China, the issue remained unresolved. All three major stock indexes ended in the red.
The Dow Jones Industrial Average (DJI) closed at 25,850.63, declining 0.4% or 103.81 points. The S&P 500 Index (INX) decreased 0.4% to close at 2,774.88. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,459.71, losing 0.4%. A total of 6.9 billion shares were traded on Thursday, lower than the last 20-session average of 7.3 billion shares. Decliners outnumbered advancers on the NYSE by 1.71-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.39-to-1 ratio. The CBOE VIX increased 3.1% to close at 14.46.
How Did the Benchmarks Perform?
The Dow ended in negative territory after three straight days of gains. Notably, 21 stocks of the 30-stocks blue-chip index finished in the red while nine ended in the green. Walgreens Boots Alliance Inc. WBA was the major loser with a decline of 1.9%. Walgreens Boots Alliance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 closed in negative territory reversing its three-day winning run. The Energy Select Sector SPDR (XLE), Communication Services Select Sector SPDR (XLC) and Health Care Sector SPDR (XLV) were major losers declining 1.6%, 0.9% and 0.9%, respectively. Notably, six out of 11 sectors of the benchmark index closed in the red while five ended in green. The tech-heavy Nasdaq Composite finished in the red reversing its eight-day winning streak, due to weak performance by large-cap tech stocks.
Weak US Economic Data
On Feb 21, the Philadelphia Fed Manufacturing index (measuring manufacturing activities of Pennsylvania, Delaware and New Jersey) for February declined significantly to -4.1 from a substantial 17 in January. This was the first negative reading since May 2016.
The National Association of Realtors reported that existing home sales declined 1.2% in January to a seasonally adjusted 4.94 million lagging the consensus estimate of 5.04 million. This was the third straight monthly decline for existing home sales and the lowest level for the metric in three years.
Further, orders for long-lasting durable goods in December increased 1.2%, well below the consensus estimate of 2%. The data was delayed due to 35-day long partial government shutdown. Core capital goods order fell 0.7% due to slowdown in orders for machines, primary metals, networking and electrical equipment.
The Department of Labor reported that jobless claims fell by 23,000 to a seasonally adjusted 216,000 for the week ended Feb. 16, below the consensus estimate of 227,000. However, the four-week average of new jobless claims grew by 4,000 to 235,750, hitting the highest level in 13 months. The number of people already collecting unemployment benefits - popularly known as continuing claims - declined by 55,000 to 1.73 million.
Eurozone’s Growth at Risk
On Feb 21, Data firm IHS Markit reported that Eurozone’s Manufacturing Purchasing Managers Index declined to a reading of 49.2 in February, its lowest reading in 69-months. Any reading below 50 indicates contraction of manufacturing activities.
Sharp decline in Eurozone manufacturing PMI was on account of significant fall in Germany’s manufacturing sector. The German manufacturing PMI declined to 47.6 in February from 49.7 in January, marking two consecutive months of manufacturing contraction.
Japan’s Manufacturing Declining
Meanwhile, the Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 48.5 in February from 50.3 in January, its lowest reading since June 2016. The sub-index for production fell to 47.0 in February from 49.4 in January. This indicates actual manufacturing output decline was much larger.
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