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S&P 500 May Regain Ground Following Three-Day Losing Streak
US Market
The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks poised to attempt another rebound following pullback seen late in the previous session.
Traders may once again look to pick up stocks at somewhat reduced levels after early buying interest faded over the course of Tuesday’s session.
The major averages spent much of yesterday’s session in positive territory before coming under pressure in the final hour of trading, with the Dow and the S&P 500 closing lower for the third straight day.
Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.
Traders may also be reluctant to make significant moves ahead of the release of reports on weekly jobless claims, Chicago business activity and pending home sales on Thursday.
A report on personal income and spending that includes readings on inflation said to be preferred by the Federal Reserve is also due to be released while the markets are closed on Good Friday.
The holiday will also see Fed Chair Jerome Powell participate in a moderated discussion before the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference.
Stocks saw modest strength throughout much of the trading day on Tuesday before coming under pressure in the final hour of the session. The major averages all moved to the downside, finishing the day in negative territory.
After climbing by more than 100 points earlier in the day, the Dow ended the session down 31.31 points or 0.1 percent at 39,282.33. The Nasdaq also fell 68.77 points or 0.4 percent to 16,315.70 and the S&P 500 dipped 14.61 points or 0.3 percent to 5,203.58.
The late-day weakness on Wall Street may have reflected concerns about the economic impact of the indefinite suspension of vessel traffic into and out of the Port of Baltimore.
Vessel traffic was suspended after a cargo ship crashed into a pillar of the Francis Scott Key Bridge early Tuesday morning, leading to the bridge’s collapse.
Networking stocks showed a notable move to the downside over the course of the session, dragging the NYSE Arca Networking Index down by 1.2 percent.
A pullback by the price of crude oil also weighed on energy stocks, with the Philadelphia Oil Service and the NYSE Arca Oil Index falling by 1.2 percent and 1.1 percent, respectively.
Utilities, semiconductor and telecom stocks also saw some weakness on the day, while strength remained visible among computer hardware stocks.
Data storage company Seagate Technology (STX) surged by 7.4 percent after Morgan Stanley upgraded its rating on the company’s stock to Upgrade from Overweight.
On the U.S. economic front, the Commerce Department released a report this morning showing a notable increase in new orders for U.S. manufactured durable goods in the month of February.
The report said durable goods orders jumped by 1.4 percent in February after plummeting by a revised 6.9 percent in January.
Economists had expected durable goods orders to shoot up by 1.3 percent compared to the 6.2 percent slump that had been reported for the previous month.
Orders for transportation equipment led the way higher, surging by 3.3 percent in February after plunging by 18.3 percent in January.
Excluding the rebound in orders for transportation equipment, durable goods orders climbed by 0.5 percent in February after falling by 0.3 percent in January. Economists had expected a 0.4 percent increase.
Meanwhile, the Conference Board released a separate report showing a slight deterioration in U.S. consumer confidence in the month of March.
The Conference Board said its consumer confidence index slipped to 104.7 in March from a downwardly revised 104.8 in February.
Economists had expected the consumer confidence index to come in unchanged compared to the 106.7 originally reported for the previous month.
U.S. Economic Reports
The Energy Information Administration is scheduled to release its report on oil inventories in the week ended March 22nd at 10:30 am ET.
Crude oil inventories are expected to dip by 1.0 million barrels after decreasing by 2.0 million barrels in the previous week.
The Treasury Department is due to announce the results of this month’s auction of $43 billion worth of seven-year notes at 1 pm ET.
At 6 pm ET, Federal Reserve Board Governor Christopher Waller is scheduled to speak on the economic outlook before an Economic Club of New York reception.
Europe
European stocks are turning in a mixed performance on Wednesday ahead of closely watched U.S. consumer price inflation data on Friday.
The release of the U.S. Federal Reserve’s favored inflation indicator along with public comments from Fed Chair Jerome Powell on Friday are expected to provide additional clues on the Fed’s rate trajectory.
Eurozone economic sentiment rose to a three-month high in March, driven by the improvement across all sectors except construction, survey data from the European Commission revealed.
The economic sentiment index climbed to 96.3 in March, as expected, from 95.5 in the previous month.
Meanwhile, French consumer confidence unexpectedly improved slightly in March, monthly survey data from the statistical office INSEE showed earlier today.
The consumer sentiment index rose to 91 from 90 in the previous month. Economists had expected the score to remain stable at 90.
Spainish consumer prices postedfaster growth in March, reflecting increase in electricity and fuel prices, flash data from the statistical office INE showed.
The consumer price index advanced 3.2 percent on a yearly basis following February’s 2.8 percent rise. The rate came in line with expectations.
France and Italy will publish their inflation figures on Friday, while German and euro area-wide data is due next week.
While the U.K.’s FTSE 100 Index is down by 0.4 percent, the French CAC 40 Index is up by 0.3 percent and the German DAX Index is up by 0.6 percent.
H&M shares have soared after the world’s second-largest listed fashion retailer beat first-quarter operating profit expectations.
DS Smith shares have also surged. Responding to media speculation, the paper and packaging company confirmed that it is in discussions with International Paper for an all-stock offer deal valued at 5.72 billion pounds ($7.22 billion).
CRH has also moved to the upside. The provider of building materials said that it has completed the second phase of the divestment of its lime operations in Europe, including the U.K.
Meanwhile, Assa Abloy AB has fallen. The Swedish manufacturing conglomerate announced that it has signed a deal to acquire Nomadix and Global Reach, U.S. and U.K.-based providers of Wi-Fi access and engagement platform solutions for the hospitality and commercial real estate industry.
Asia
Asian stocks ended mixed in a holiday-shortened week on Wednesday, with Chinese and Hong Kong markets leading regional losses on growth worries, while Japanese stocks rallied on yen weakness amid dovish BOJ talk.
The dollar held steady as investors awaited more signals from U.S. inflation data and Fed Chair Jerome Powell’s speech due later in the week.
Gold traded in a tight range, while oil prices dipped for a second straight session after industry data revealed a significant surge in crude stockpiles in the United States.
Chinese markets ended deep in the red despite Pan Gongsheng, governor of the People’s Bank of China, attempting to dispel concerns over the country’s laggard property market.
The worst has passed, and the market is showing “positive signals,” he said at a closed-door meeting with representatives of domestic and overseas financial institutions.
Traders also ignored data showing that profits at Chinese industrial firms jumped 10.2 percent in the first two months from the same period last year.
China’s Shanghai Composite Index slumped 1.3 percent to 2,993.14 as investors awaited earnings results from major financial institutions.
Hong Kong’s Hang Seng Index tumbled 1.4 percent to 16,392.84. Alibaba Group Holding declined 2.1 percent after calling off an initial public offering for its Cainiao logistics arm in a surprise move.
Japanese markets logged strong gains, while the yen hit a 34-year low against the dollar after hawkish BOJ board member Naoki Tamura said there’s no set formula in terms of conditions for raising rates again.
The Nikkei 225 Index jumped 0.9 percent to 40,762.73, led by tech and exporter issues. The broader Topix Index climbed 0.7 percent to 2,799.28.
Seoul stocks ended on a flat note and the won hit its lowest level in nearly four months ahead of the release of key U.S. inflation data. The Kospi finished marginally lower at 2,755.11.
Memory chip maker SK Hynix rallied 2.6 percent after its CEO said the firm expects strong demand from the artificial intelligence industry this year.
Australian markets ended on a positive note as February consumer inflation data came in lower than expected, reinforcing expectations the next move in interest rates would be a cut.
The benchmark S&P/ASX 200 Index rose 0.5 percent to 7,819.60, with banks and healthcare stocks leading the way higher. The broader All Ordinaries Index settled 0.5 percent higher at 8,073.60.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.2 percent to 12,010.66.
Commodities
Crude oil futures are falling $0.50 to $81.12 a barrel after falling $0.33 to $81.62 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,207.90, up $8.70 compared to the previous session’s close of $2,199.20. On Tuesday, gold inched up $1.
On the currency front, the U.S. dollar is trading at 151.25 yen compared to the 151.56 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0815 compared to yesterday’s $1.0831.
