By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Apple's 1.7% lifts Nasdaq Composite
NEW YORK (MarketWatch)--U.S. stocks ended Tuesday's choppy
session broadly lower, with the Dow industrials posting a
triple-digit loss.
Investors wrestled with jitters as the Federal Open Market
Committee two-day meeting got under way, with many expecting the
central bank to pave the way to an interest-rate hike as early as
this summer by removing the word "patient" from its statement.
See: How markets may react to Fed's lack of patience
(http://www.marketwatch.com/story/how-markets-may-react-to-feds-lack-of-patience-2015-03-17)
The S&P 500 (SPX) closed 6.99 points or 0.3%, lower at
2,074.20, with nine of its 10 main sectors finishing lower.
The Dow Jones Industrial Average (DJI) dropped 128.34 points, or
0.7%, to 17,849.08, with 25 of its 30 members posting losses.
The Nasdaq Composite's (RIXF) defied the trend and closed in
positive territory, up 7.93 points, or 0.2%, at 4,937.43, with the
help of Apple Inc.'s (AAPL) 1.7% gain.
"The sideways trading action since the end of QE is an
indication that people are confused about the economy. Tomorrow's
statement is unlikely to bring about any clarity to markets, as the
Fed is likely to replace the word 'patient' with 'slow path'
rhetoric," said Ed Shill, chief investment officer at QCI Asset
Management.
"But markets are absolutely wrong about the June-September rate
hike, because they have ignore one of the biggest words the Janet
Yellen has been saying all this time--'if'. The Fed will raise if
we see strong employment growth, wage growth and inflation at 2%.
But none of that is happening," Shill said.
In Tuesday's economic news, data showed construction on new U.S.
homes slumped in February
(http://www.marketwatch.com/story/housing-starts-slump-on-winter-weather-2015-03-17),
mostly due to harsh winter, but permits jumped, suggestion
construction will pick up in the spring.
Softer data over the past two months had pushed expectations of
a rate hike further out, resulting in markets rallying on 'bad
news," which was seen delaying a rate hike, and falling on "good
news." However, so far this year, the S&P 500 moved largely
sideways, rising less than 1% since the start of the year.
(http://www.marketwatch.com/story/heres-what-to-watch-from-the-fed-this-week-2015-03-16)Read:
How markets may react to Fed's lack of patience
(http://www.marketwatch.com/story/how-markets-may-react-to-feds-lack-of-patience-2015-03-17)
Diane Jaffee, senior portfolio manager at TCW, an asset manager
with $7 billion under management, said much of the market expects
the word "patient" won't be removed from the central bank's
statement.
"After lower consumer sentiment figures, markets think the Fed
will keep 'patient' and if it does not, then we are in for a
selloff," Jaffee said. "But ultimately, the Fed will start raising
rates some time this year and markets will go through rough
patches," she said.
Stocks to watch:Burlington Stores Inc.(BURL) rose 2.1% after the
discount retailer posted better-than-expected fourth-quarter profit
and revenue.
Plug Power Inc.(PLUGD) shares dropped 5.1% after the company
missed earnings and sales estimates.
Shares of American Airlines Group Inc. (AAL) jumped 6.9% after
Standard & Poor's said late Monday that the airline will be
included in the S&P 500 index.
Apple Inc.(AAPL) jumped 1.7% after The Wall Street Journal,
citing sources, reported that the tech company is in talks with
programmers
(http://www.marketwatch.com/story/apple-in-talks-to-launch-online-tv-service-2015-03-16-221031419)
to launch an online television service based on a slim bundle of TV
networks.
Read more about stock action in the Movers & Shakers column
(http://www.marketwatch.com/story/oracle-adobe-burlington-stores-earnings-in-focus-2015-03-17).
Other markets: European stocks fell, with the Stoxx Europe 600
declining 0.7% to 397.33. In Asia, the Nikkei 225 index scored a
new 15-year closing high
(http://www.marketwatch.com/story/japanese-stocks-close-at-fresh-15-year-high-after-boj-decision-2015-03-17),
while Shanghai Composite Index stocks closed above the 3,500 mark
for the first time in nearly seven years.
Oil prices
(http://www.marketwatch.com/story/us-oil-prices-under-pressure-after-hitting-six-year-low-2015-03-17-31031510)(CLJ5)
fell for the sixth straight session, with WTI contract settling 1%
lower at $43.46 a barrel. Gold prices
(http://www.marketwatch.com/story/gold-seesaws-ahead-of-key-fed-meeting-2015-03-17)(GCJ5)
settled at the lowest level since November, foaling 0.4% to
$1,148.20. The greenback (DXY) gave back some ground against major
currencies on Tuesday.
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