Benchmarks closed in the red for the fourth straight session after ECB reduced its growth forecast for the eurozone economy. The central bank also announced plans to revive the slowing economy. Meanwhile, President Trump stated that talks with China were advancing. Concerns of an impending global economic slowdown hurt market sentiments.
The Dow Jones Industrial Average (DJI) decreased 0.8%, to close at 25,473.23. The S&P 500 decreased 0.8% to close at 2,771.45. The tech-laden Nasdaq Composite Index closed at 7,421.46, losing 1.1%. The fear-gauge CBOE Volatility Index (VIX) increased 10.3% to close at 17.38. Decliners outnumbered advancers on the NYSE by a 1.96-to-1 ratio. On Nasdaq, a 1.51-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow lost 200.2 points to end the session in negative territory. Losses for the 30-stock index were buoyed by a dip in the shares of Walgreens Boots Alliance, Inc. WBA and Caterpillar CAT, which declined 2.1% and 1.5%, respectively.
The S&P 500 declined 22.5 points to also end in the red. Of the 11 major sectors of the S&P 500, ten ended in the negative territory, with consumer discretionary and financials leading the decliners. The Consumer Discret Sel Sect SPDR ETF (XLY) and the Financial Select Sector SPDR ETF (XLF) lost 1.2% and 1%, respectively.
Shares of Bank of America BAC, Goldman Sachs GS, Morgan Stanley MS and Citigroup C declined approximately 1% each and weighed on the broader index. Meanwhile, the Nasdaq lost 84.5 points to also end in negative territory. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ECB Extends Help to Lift Up Eurozone Economy
The European Central Bank (ECB) announced on Mar 7 that it plans to introduce a series of long-term loans to eurozone banks in a bid to boost the faltering eurozone economy. Further, ECB issued a statement on Thursday, following its policy meeting, that it would hold interest rates steady till the end of 2019.
The ECB announced the launch of a new program which would offer cheap loans to eurozone banks and in return such banks would have to pledge to maintain lending. Termed as the targeted long-term refinancing operations, or TLTROs, the program is supposed to go active from September 2019 and continue through March 2021 and each round would provide two-year loans.
The central bank opined that inflation in the eurozone economy will reach near its target level of about 2%. These announcements were made after ECB slashed its growth projection for the eurozone economy from 1.7% to 1.1%.
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.
On the economic data front, initial claims for the week ending Mar 2, 2019 fell to 223,000 from 26,000 in the previous week. Meanwhile, the U.S. Labor Department reported that productivity of workers in the United States increased at an annual rate of 1.9% in the fourth quarter of 2018.
Stocks That Made Headlines
Trinity Rewards Investors With Dividend Hike & Buyback Plan
Trinity Industries TRN announced that its board of directors has approved a new share repurchase program worth $350 million. (Read More)
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