By Anora Mahmudova and Sara Sjolin, MarketWatch
Producer price fall; Consumer sentiment slides in March
NEW YORK (MarketWatch) -- U.S. stocks moved lower on Friday and
the main indexes looked set to register losses for the third week
in a row, finishing what has turned out to be a turbulent five-day
trading stretch.
Investors grappled with a set of mixed economic reports over the
week, with each data set shifting expectations of the first rate
hike, while heightened volatility amplified moves on Wall
Street.
Friday's producer prices report showed a surprise drop,
indicating persisting deflationary pressures. Meanwhile, consumer
sentiment slid in March, falling more than experts had
forecast.
Delivering another dollop of worry to the dour mood on the
Street was renewed selling in oil prices sparked by a report
pointing to heightened production.
The S&P 500 (SPX) saw broad-based losses, with all 10 main
sectors trading lower.
The Dow Jones Industrial Average (DJI) was lower with two-thirds
of its 30 members trading lower.
The Nasdaq Composite (RIXF) also edged lower.
"Volatility in the stock market rose since the end of tapering
last October, which we see as the first de facto tightening," said
Daniel Skelly, lead portfolio manager at Morgan Stanley Wealth
Management.
"While we still see modest returns this year, likelihood of more
choppy trades is high," Skelly added.
Skelly noted that mixed economic picture, especially lack of
wage growth, overall slack in the labor market and fragile state of
the rest of the world economy give enough reasons for the Federal
Reserve to be hesitant with the rate hike this year. But
regardless, Skelly thinks market reaction to the actual rate hike
will be measured.
The Federal Open Market Committee meets next week on Tuesday and
Wednesday, and although no rate changes are expected this time,
investors will closely be watching Chairwoman Janet Yellen's news
conference for any hints on how patient the central bank will be
before tightening its monetary policy.
Friday's data: The University of Michigan's consumer sentiment
index dropped to the lowest level since November.
Separately, despite the first rise in gasoline costs since last
summer, U.S. producer prices fell in February for the fourth
straight month, mainly because of a sharp drop in volatile category
of retail trade margins.
Earnings: Clothing retailer Ann Inc.(ANN) delivered a surprise
fiscal fourth-quarter profit, as both total sales and same-store
sales beat expectations. Shares jumped 8%.
Movers and shakers: Shares of Aéropostale Inc.(ARO) dived 14%
after the apparel retailer said it forecast a larger-than-expected
loss in the first quarter.
FXCM Inc.(FXCM) surged 26% after the foreign-exchange broker's
fourth-quarter earnings released on Thursday topped consensus
estimates
(http://www.marketwatch.com/story/fxcms-stock-rallies-after-better-than-expected-profit-sales-2015-03-12).
Herbalife Ltd.(HLF) jumped 8% after a Wall Street Journal report
that federal investigators were interviewing people connected to
hedge-fund billionaire Bill Ackman in a possible stock-manipulation
probe
(http://www.marketwatch.com/story/ackmans-people-interviewed-in-potential-herbalife-manipulation-probe-2015-03-12).
eBay Inc.(EBAY) picked up 1.1% ahead of the bell after
Susquehanna Financial upgraded the company to positive from
neutral.
Other markets: In Asia, the Nikkei Average jumped above 19,000
for the first time since April 2000
(http://www.marketwatch.com/storyno-meta-for-guid). European
markets were mixed, with the U.K.'s FTSE 100 index darted between
gains and losses
(http://www.marketwatch.com/storyno-meta-for-guid), hit by utility
shares.
Crude oil accelerated losses after the International Energy
Agency said the recovery for oil prices remains fragile
(http://www.marketwatch.com/story/iea-oil-price-recovery-still-fragile-2015-03-13)
amid a production rebound in the U.S. and brimming inventories.
Most metals rose, while the ICE dollar index (DXY) climbed above
100, for the first time since March 2003.
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