US Stocks End Mixed Ahead Of Key Fed Meeting

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Summary

• S&P 500 dropped 0.16%, Dow Jones ticked down 0.39%, and NASDAQ gained 0.09%.
• Technology, utilities, and real estate stocks edged higher amid a lacklustre session.
• Nokia to layoff at least 10,000 workers to compensate 5G investments.

US stocks closed mixed on Tuesday, weighed down by most sectors, such as energy, consumer cyclicals, healthcare, and industrials, ahead of a key meeting of the Federal Reserve, in which it is likely to reflect on the country’s GDP growth, employment, and various other economic indicators.

The S&P 500 dropped 0.16% to 3962.71. The Dow Jones Industrial Average was down 0.39% to 32825.95. The NASDAQ Composite Index gained 0.09% to 13471.57, and the small-cap Russell 2000 shed 1.72% to 2319.52.

In Wednesday’s meeting, Fed officials are likely to note the progress made so far in various categories, including jobs, industry, and covid relief, as well as make projections for the upcoming quarters. The central bank had ruled out any interest rate hike in the short-term. In its last forecasts in December, it had projected a GDP growth of 4.2 percent and inflation of 1.8 percent in 2021.

It is hoped the stimulus spending would help regain strength in the economy. Still, inflation would be a major area that economists and bank officials would be closely monitoring over the next few quarters. The bank had previously noted that inflation in the range of 2 percent is non-threatening.

Recent official data had shown a significant improvement in the labor market as well as in consumer spending, a key component of the US economic activity. Investors appeared to maintain their wait-and-watch strategy before the Fed’s key forecasts on the economy. Technology stocks have been losing steam in recent weeks after an extraordinary run on the indices over the past year.

The Commerce Department said on Tuesday that retail sales, which saw a spike in the previous month, declined by 3 percent in February due to supply chain disruptions and cold weather. The broader outlook, however, remained positive as the stimulus checks were likely to boost spending during spring, it said. In January, retail sales were up 7.6 percent compared to the preceding month.

Also, in a separate note, the Federal Reserve said on Tuesday that industrial output fell by 2.2 percent in February compared to the month-ago period. The productions declined amid shortages of electronic chips and semiconductors widely used in the tech and auto industries.

Meanwhile, the Federal Trade Commission (FTC), which is currently probing Facebook over its alleged monopoly tactics, has hinted at tougher scrutiny in the mergers of drug companies. Acting FTC chief Rebecca Kelly Slaughter said on Tuesday that the Biden administration would closely monitor the actions of companies that may seek to eliminate competition through acquisitions.

In the corporate world, Nokia has announced to layoff at least 10,000 workers to compensate its 5G investments as part of a restructuring plan. The layoffs will account for almost 11 percent of the jobs in the company. Its current workforce is about 90,000 workers.

In Tuesday’s session, technology, utilities, and real estate saw mixed gains, while consumer non-cyclicals, healthcare, basic materials, consumer cyclicals, industrials, financials, and energy stocks pulled back.

 Pic Credit: Pixabay.

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Top Gainers

Top performers on S&P 500 included Fox Corp (3.47%), Applied Materials Inc (3.15%), and Allegion PLC (3.02%). On NASDAQ, top performers were Fintech Acquisition Corp V (43.43%), Lizhi Inc (29.51%), New Fortress Energy Inc (27.38%), and aTyr Pharma Inc (26.34%). On Dow Jones, Amgen Inc (1.85%), Intel Corp (1.55%), Apple Inc (1.27%), and Home Depot Inc (1.27%) were among the leaders.

Top Losers

Top laggards on S&P 500 included Nov Inc (-10.34%), Ford Motor Co (-5.38%), Freeport-McMoRan Inc (-5.33%), and Royal Caribbean Cruises Ltd (-5.32%). On NASDAQ, Oriental Culture Holding Ltd (-35.59%), Solid Biosciences Inc (-32.39%), Sigma Labs Inc (-29.38%), and Kaspien Holdings Inc (-28.83%) were the losers. On Dow Jones, Boeing Co (-3.92%), American Express Co (-2.51%), Chevron Corp (-2.37%), and Honeywell International Inc (-2.03%) were among the laggards.

 Image Source: Refinitiv, NASDAQ One-Year price chart, March 16, 2021.

Volume Movers

Top volume movers included Sundial Growers Inc (43.37mn), Apple Inc (19.61mn), Savara Inc (15.65mn), Lizhi Inc (14.29mn), ViacomCBS Inc (12.08mn), Streamline Health Solutions Inc (11.52mn), Naked Brand Group Ltd (10.73mn), Fuelcell Energy Inc (10.60mn), Ford Motor Co (22.72mn), (19.60mn), General Electric Co (12.69mn), ViacomCBS Inc (12.08mn), AT&T Inc (9.72mn), Microsoft Corp (9.51mn), Intel Corp (9.29mn), and Cisco Systems Inc (5.74mn).

Futures & Commodities

Gold futures were up 0.05% to $1,730.05 per ounce, silver prices declined 1.13% to $25.992 per ounce, and copper was down 1.92% to $4.0610.

Brent oil futures were down 0.03% to $68.53 and WTI crude dropped 0.67% to $64.95 per barrel.

Bond Market

The 30-year treasury bond yields were up 0.44% to 2.379, while the 10-year bond yields gained 0.90% to 1.621.

US Dollar Futures Index was up 0.04% to 91.873.

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In other development, White House Chief Medical Adviser Anthony Fauci has said that the coronavirus threat is starting to wane, but the authorities must continue to monitor the situation closely as any lapse may trigger a re-emergence of new cases as witnessed in Europe and elsewhere.

The Fed meeting assumes significance as it may also shed light on its possible actions on the bond market. Fed Chairman Jerome Powell had earlier noted that the bank would not scale-back its $120 billion a month bond purchases until the economy sees significant progress.