US Stocks End Lower On Lingering Worries Over Volatility, Recovery

Source: Sodel Vladyslav,Shutterstock

Summary

• S&P 500 dropped 0.81%, Dow Jones plunged 0.46%, and NASDAQ shed 1.69%.
• Most industry sectors that were up in the previous session declined on Tuesday.
• Ten-year US Treasury Bond yields dropped 2.36% to 1.412.

US stocks ended lower on Tuesday as lingering concerns over market volatility, oscillating bond yields, and the government’s spending bill mired in Senate debate weighed on investors’ minds.

The S&P 500 dropped 0.81% to 3870.29. The Dow Jones Industrial Average plunged 0.46% to 31391.52. The NASDAQ Composite Index shed 1.69% to 13358.79, and the small-cap Russell 2000 ticked down 1.93% to 2231.51.

Investors were grappled with concerns about what steps the Federal Reserve would take next to curb the current volatility and the likely inflationary pressures in the weeks ahead.

A raft of government spending measures and a spike in demand have helped boost manufacturing activities in February, but increased cash flows into the economy have also led to a rise in consumer prices. Markets were waiting for the central bank’s response on rate volatility. 

Meanwhile, Senate Democrats have reportedly scrapped a minimum wage clause in a modified version of President Biden’s relief package after Republican members held their ground against it. The Senate is expected to vote on the amended document this week.

The Biden administration had considered raising the minimum hourly pay from $7.25 to $15, but the GOP members opposed it saying it will raise fiscal pressures. Democrats then mulled a backup plan to bypass the resistance by working on a limited hike through the tax code, but it was later dropped.

Democrats were hoping not to waste any more time with the bill in the Senate so they can start releasing the funds. Some Senators, though, have called for narrowing down the targeted groups so that the affluent people, who do not need help, can be screened out.

The bond market has seen high volatility in recent days, dragging down the stock prices and forcing investors to look out for other avenues of investment. But prices have been stabilized since the last two sessions after reaching a notable high in the last fortnight.

Most sectors that were up in the previous session declined on Tuesday. Utilities, industrials, financials, consumer cyclicals, technology, real estate, energy, and healthcare stocks, among others, remained subdued.

Pic Credit: Pixabay.

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Top Gainers

Top performers on S&P 500 included Fox Corp (10.52%), Fox Corp (9.19%), Nielsen Holdings PLC (7.69%), and Carnival Corp (5.51%). On NASDAQ, top performers were Communications Systems Inc (34.58%), Fortress Biotech Inc (28.09%), Amyris Inc (27.20%), and Solid Biosciences Inc (21.95%). On Dow Jones, Dow Inc (2.36%), Chevron Corp (0.96%), Merck & Co Inc (0.84%), and Coca-Cola Co (0.62%) were among top the leaders.

Top Losers

Top laggards on S&P 500 included Enphase Energy Inc (-8.02%), Target Corp (-6.29%), Twitter Inc (-4.80%), and Teradyne Inc (-4.63%). On NASDAQ, Inseego Corp (-31.67%), FibroGen Inc (-23.25%), Luokung Technology Corp (-20.72%), and Morphic Holding Inc (-16.76%), and on Dow Jones, Intel Corp (-2.37%), Caterpillar Inc (-1.88%), Apple Inc (-1.77%), and Salesforce.Com Inc (-1.68%) were among the laggards.

Image Source: Refinitiv, NASDAQ YTD price chart, March 2, 2021.

Volume Movers

Top volume movers included Sundial Growers Inc (30.27mn), Apple Inc (15.64mn), Communications Systems Inc (13.01mn), Castor Maritime Inc (7.86mn), Conformis Inc (6.94mn), Ideanomics Inc (5.85mn), Ford Motor Co (13.68mn), General Electric Co (8.74mn), Carnival Corp (5.85mn), Advanced Micro Devices Inc (5.56mn), and Microsoft Corp (5.45mn). 

Futures & Commodities

Gold futures were up 0.57% to $1,732.90 per ounce, silver prices gained 0.55% to $26.825 per ounce, and copper was up 2.39% to $4.2112.

Brent oil futures were down 1.70% to $62.61 and WTI crude dropped 1.68% to $59.62 per barrel.

Bond Market

The 30-year treasury bond yields were down 0.56% to 2.209, while the 10-year bond yields dropped 2.36% to 1.412.

US Dollar Futures Index was down 0.27% to 90.793.

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Meanwhile, the government is expected to introduce a slightly modified version of the relief bill for the Senate vote this week. Although there is no opposition regarding the bill’s size, some lawmakers want it to be more specific about the targeted population to avoid unnecessary wastage of money.

The administration has computed $1400 funding to every needy household as part of President Biden’s $1.9 trillion economic relief package. It wants to expedite the bill as the current round of benefits is due to expire sometime later this month. Besides extending household allowances, it also seeks to ramp-up vaccine distribution, food stamps, and help accelerate the opening of schools.