Friday, 20 July, 2018

Global stocks turn lower as investors watch Fed comments

Fed chief Powell returns to Congress as markets seek clarity Fed chief Powell returns to Congress as markets seek clarity
Nellie Chapman | 03 March, 2018, 13:54

Wednesday was another down day for the broad USA markets with all three of the major exchanges closing lower on the day.

Patterson Companies fell to the biggest loss in the S&P 500 after it reported weaker earnings for the latest quarter than analysts expected and said that its chief financial officer was leaving.

"We've had tariffs put in place for aluminum and steel before, the market always finds a place through it", said Michael Mattioli, portfolio manager at Manulife Asset Management.

U.S. Steel was up $2.26, or 5.2 per cent, to $45.77, and AK Steel jumped 45 cents, or 6.5 per cent, to $5.50.

The Standard & Poor's 500 index fell 3 points, or 0.1 percent, to 2,710. Eastern time. The index is coming off its worst month in two years, when concerns about higher inflation and rates helped trigger a 10 per cent drop. The Dow Jones Industrial Average fell 388 points, or 1.5%, to 25,024.

Caterpillar (CAT) and Boeing (BA) racked up the heaviest early declines on the Dow, off more than 1% each.

Trump's announcement comes at a time when the markets were already on edge over rising United States interest rates and bond yields, though some investors said a lot of details still need to be worked out.

The S&P 500 and Dow Jones were down 1.1% and 1.5% respectively by market close on Wednesday, causing the S&P 500 to drop 3.9% in February marking its first monthly drop since March 2017, thereby ending a market rally last seen between March 1958 and January 1959.

"If the Federal Reserve raises rates more quickly than previously expected, then it's likely to put a damper on stocks in the near term".

In Europe, Frankfurt's DAX tanked 1.4% and the CAC-40 in Paris dropped 0.8%. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 2.879%.

But an early economic release from the Commerce Department showed growth in the department's PCE Price Index inflation gauge slowed sharply, up 0.1%, vs. a 0.4% gain in December and well below the consensus target for a 0.4% gain. Brent crude, the worldwide standard, rose 54 cents to $64.37 a barrel.

Gold was flat at $1,319.00.

The dollar dipped to 106.40 from 106.66 yen late Wednesday. Tokyo's Nikkei 225 dived 1.6%, while Hong Kong's Hang Seng index popped 0.7%. The euro rose to $1.2331 from $1.2255, and the British pound rose to $1.3790 from $1.3768.