Benchmarks ended in the red on Wednesday after a slew of weak economic reports weighed on the markets. Fed’s Beige Book provided a rather gloomy picture of the U.S. economy in the period between January and February, citing partial government shutdown as the primary reason behind such a slowdown. Meanwhile, Trump urged U.S. negotiators to strike a trade with China so that markets might finally find the catalyst required for growth.
The Dow Jones Industrial Average (DJI) decreased 0.5%, to close at 25,673.46. The S&P 500 decreased 0.7% to close at 2,771.45. The tech-laden Nasdaq Composite Index closed at 7,505.92, losing 0.09%. The fear-gauge CBOE Volatility Index (VIX) increased 6.8% to close at 15.74. Decliners outnumbered advancers on the NYSE by a 1.96-to-1 ratio. On Nasdaq, a 2.47-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow lost 133.2 points to end the session in negative territory. Losses for the 30-stock index were buoyed by a dip of about 3.6% in the shares of Walgreens Boots Alliance, Inc. WBA. The Dow Transports dipped 0.5% to post its ninth decline on the trot, marking the longest streak of losses since 2009.
The S&P 500 declined 18.2 points to also end in the red. Of the 11 major sectors of the S&P 500, nine ended in the negative territory, with healthcare and energy leading the decliners. The Health Care Select Sector SPDR ETF (XLV) and the Energy Select Sector SPDR ETF (XLE) lost 1.5% and 1.3%, respectively.
Shares of Nektar Therapeutics NKTR and HCA Healthcare, Inc. HCA declined 5.2% and 4.9%, respectively and weighed on the broader index. Further, oil prices slid 0.6% after the Energy Information Administration announced that U.S. crude inventories increased to 7.1 million barrels last week. Such developments also weighed on the S&P 500.
Meanwhile, the Nasdaq lost 70.4 points to also end in negative territory. This marked the tech-laden index’s first three-day decline this year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dismal Economic Data Weighs on Markets
Lackluster economic data dragged the markets lower on Wednesday. The Federal Reserve released its Beige Book which sheds light on general business conditions in the economy. The report stated that 10 of Fed’s 12 districts witnessed “slight-to-moderate” growth rate in the period between January and February.
The report also stated that the partial government shutdown was the reason behind slower growths in as many as six districts. The shutdown impacted sectors like retail, auto sales, real estate, restaurants as well as manufacturing in the period.
Per ADP (ADP), private sector added 183,000 jobs in the month of February. The number of job additions came in lower than the consensus estimate of 187,500 jobs.
Meanwhile, trade deficit in the United States surged 19% in December to $59.8 billion. This marked its highest level in the last 10 years. Such tepid economic data weighed on market sentiment.
U.S. – China Trade Deal Might Be Reached Soon
Bloomberg reported on Mar 6 that President Trump is pressing negotiators from the United States to finalize a trade deal with China. Trump believes this would provide the necessary stimulus for stocks to rise higher.
Stocks That Made Headlines
Abercrombie Surges on Q4 Earnings Beat & Robust View
Abercrombie & Fitch Co. ANF reported solid fourth-quarter fiscal 2018 results, wherein top and bottom lines beat estimates. (Read More)
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