US Markets End Lower; What's Weighing On Stocks?

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US Markets End Lower; What's Weighing On Stocks?

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 US Markets End Lower; What's Weighing On Stocks?

Summary

  • S&P 500 was down 0.03%, and Tech-heavy NASDAQ shed 0.58%.
  • Industrials, financials, basic materials, and technology stocks drag down indexes.
  • Retail sales move up 5.3% in January, backed by stimulus measures.

US stock markets ended the session lower on Wednesday after positive retail sales data failed to ignite enthusiasm among investors and uncertainties over the economic recovery remained.

The S&P 500 was down 0.03% to 3931.33. The Dow Jones Industrial Average was up 0.29% to 31613.02. The NASDAQ Composite Index shed 0.58% to 13965.49 and the small-cap Russell 2000 ticked down 0.74% to 2256.13.

Markets appeared to be cautious after a surge in stock prices in early February, fuelled by social media-led rallies, and record highs on the indexes which had captivated investors.

Following on the positive trends in the economy, the Commerce Department said on Wednesday that consumer spending increased significantly in January, rising by 5.3%, compared to the figure in the previous month. The trend may have signalled a rebound backed by stimulus measures.

The sales growth would help offset a slump seen during the holiday season, which had raised more concerns than confidence. It was the strongest rebound since June, the Department noted.

The retail spike could be due to an additional $900 billion approved in December by then-President Donald Trump in federal unemployment grants, which may have provided the leeway to spend.

Since consumer spending is a significant part of the US economic output, the retail data may have indicated the recovery could be slowly gaining momentum.

Investors were buoyed by the news of Saudi Arabia planning to increase oil output as the price forecast improves. There have been concerns of fuel and gas shortage in the US following a cold blast over the weekend, which had crippled key power grids and oil refineries in the country.

Moreover, the recent increase in government bond yields could have also dissuaded some investors from hedging their bets on risky investments, say experts.

On Wednesday, several sectors saw muted performance, including industrials, financials, basic materials, and technology. Energy, consumer cyclicals, utilities, and consumer non-cyclicals gave a better performance.

 

Image Source: Pixabay


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Top Gainers

Top performers on S&P 500 included Tractor Supply Co (6.14%), Verizon Communications Inc (5.59%), Wells Fargo & Co (4.71%), and Kraft Heinz Co (4.57%). On NASDAQ, top performers were CLPS Inc (125.10%), Powerbridge Technologies Co Ltd (107.12%), NXT-ID Inc (68.72%), and ZW Data Action Technologies Inc (59.65%). On Dow Jones, Verizon Communications Inc (5.55%), Chevron Corp (2.72%), Home Depot Inc (2.14%), and Merck & Co Inc (2.04%) were among the leaders.


Top Losers

Top laggards on S&P 500 included IPG Photonics Corp (-7.16%), Henry Schein Inc (-5.02%), PVH Corp (-4.00%), and Discover Financial Services (-3.86%). On NASDAQ, Socket Mobile Inc (-36.07%), Pyxis Tankers Inc (-33.45%), Luokung Technology Corp (-27.50%), and Sify Technologies Ltd (-27.43%). On Dow Jones, Apple Inc (-1.82%), American Express Co (-1.39%), Honeywell International Inc (-0.87%), and Boeing Co (-0.84%) were among the top laggards.

 

 

Image Source: Refinitiv, NASDAQ Composite Index YTD price chart, 17 February 2021

Volume Movers

Some of the top volume movers included Sundial Growers Inc (43.52mn), Onconova Therapeutics Inc (30.38mn), CLPS Inc (22.42mn), Ebang International Holdings Inc (18.09mn), Dogness International Corp (16.83mn), Ehang Holdings Ltd (16.44mn), Apple Inc (15.81mn), Carnival Corp (7.13mn), Ford Motor Co (6.66mn), Verizon Communications Inc (4.93mn), and Intel Corp (3.69mn).          


Futures & Commodities


Gold futures were down 1.36% to $1,774.50 per ounce, silver was up 0.40% to $27.435 per ounce, while copper was shed 0.27% to $3.8237.

Brent oil futures for April delivery were up 1.70% to $64.44 and WTI crude futures for March delivery were up 1.93% to $61.21.

Bond Market

The yield on the US 30-year Treasury bond was down 1.95% to 2.049. The yield on the 10-year US Treasury bond was up 1.05% to 1.285.

US Dollar Index Futures was up 0.46% to 90.918.

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Despite some concerns on the economy, investors would look forward to ending the earnings season on a positive note. Several key segments, including retail and healthcare, are expected to present their earnings reports in the coming weeks.

Another major area of focus would be the pharmaceutical sector, which received a massive boost from the government orders for various drugs, including COVID-19 vaccines. Sales of many US drugmakers, such as Pfizer Inc and Moderna Inc, had surged from the COVID vaccine orders.

Pfizer had said earlier that its Covid-19 vaccine sales could hit the $15 billion mark in 2021. Its top-line growth was under $42 billion in 2020. Others, such as Gilead Sciences, have also forecast increased sales. Gilead expects $2-3 billion in sales in 2021.

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