4:05pm: US equities drop ahead of Fed guidance
US stocks fell in mixed session as investors awaited guidance for the US Federal Reserve on interest rates and inflation.
The Dow Jones Industrial Average declined from its record high and snapped a seven-day winning streak amid the passage of the $1.9 trillion stimulus bill. Concerns are now growing about rising interest rates and that effect on the recovery.
On the day, the DJIA dropped 127 points, or 0.39%, to 32,825. The S&P 500 fell 0.16% to 3,962 but the tech-heavy Nasdaq rose 0.09% to 13,471.
12.28pm: US benchmarks still mixed
Wall Street shares were mixed at lunch and the Nasdaq was the standout performer, while the S&P 500 was flat.
The Nasdaq added over 91 points at 13,551, while the Dow Jones Industrial Average dropped over 147 points at 32,805. The S&P 500 is around flat at 3,969.
“The NASDAQ 100 is the outperformer of the major US indices and the tech component of the S&P 500 is helping the index outstrip the Dow Jones. It seems that traders are seeking out relatively cheap tech stocks today, in light of the fact they fell the most in the past month,” said analyst at CMC Markets David Madden.
Traders were also mulling over US retail sales data for February, which showed a 3% contraction, greatly undershooting the negative 0.5% economists had been expecting, but conversely January’s stellar 5.3% reading was revised up to 7.6%.
“When you take an average of the two updates, it still paints a positive picture with respect to consumer appetite,” said Madden.
“Seeing as January’s report was heavily influenced by the $900 billion spending programme that was introduced in late December, it seems likely that future reports will reflect the $1.9 trillion stimulus package.”
In company news, Moderna Inc (NASDAQ:MRNA) shares shot up over 7% to US$154.40 as it has emerged the pharma giant is now carrying out a study of testing its coronavirus (Covid-19) vaccine on children.
11.30am: Proactive North America headlines:
One World Lithium Inc (CSE:OWLI) (OTCQB:OWRDF) to resume Phase III drilling program at Salar del Diablo lithium brine property in April
Midwest Energy Emissions Corp (OTCQB:MEEC) signs two-year master supply agreement contract extension with major coal-fired utility located in Oklahoma
Recruiter.com Inc (OTCQB:RCRT) partners with QuickFee to bring flexible online payment solutions to more than 800,000 recruiting and HR professionals
PharmaDrug Inc (CSE:BUZZ) (OTCPINK:LMLLF) teams up with leading DMT researcher Jimo Borjigin at the University of Michigan in new study collaboration
Lexaria Bioscience Corp (NASDAQ:LEXX) (CSE:LXX) (OTCMKTS:LXR) reports progress in two antiviral drug studies in its 2021 applied R&D program
Empress Royalty Corp (CVE:EMPR) inks deal for “bought deal” offering of units for gross proceeds of C$12,000,000
CytoDyn Inc (OTCQB:CYDY) appoints new chief operating officer
Metalla Royalty & Streaming Ltd (NYSEAMERICAN:MTA) (CVE:MTA) (FRA:X9C) picks up royalty on large gold development project in Brazil for up to US$18M
9.40am: Wall Street mixed at start
The main indices on Wall Street have moved in different directions on Tuesday morning as traders seemed unsure of which way to turn.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.13% at 32,915. The other indices were positive, with the S&P 500 climbing 0.12% to 3,973 while the Nasdaq rose 0.65% to 13,546.
Markets seem to be waiting for more clarity on the direction the economy could take, with many likely to hold fire until after the Federal Reserve meets on Wednesday.
New US industrial production data may also have thrown a spanner in the works, showing a 2.2% drop in February as severe winter weather dented factory output.
7:50am: Wall Street set for mixed start
After hitting new highs yesterday, US markets are set for an indecisive opening today.
The Dow Jones Industrial Average is expected to slide 19 points to 32,934 while the S&P 500 is tipped to open one point higher at 3,970.
The Nasdaq 100, which was fell back yesterday, is again expected to be out of step, opening 58 points higher at 13,140.
“The intense focus on US treasury yields is easing, aided by a shift lower in the benchmark 10-year bond yield to 1.60% ahead of the Fed’s rate decision tomorrow,” said OANDA’s Sophie Griffiths.
“No change in policy is expected. Both the GDP and inflation forecast are expected to be upgraded and accompanied by a statement from the Fed saying they will remain accommodative. A win-win for the markets, surely? Only if they believe the Fed.
“US futures are easing back off the record highs reached in the previous session. Attention will now turn to US retail sales, which are expected to ease slightly -0.5% MoM [month-on-month] in February after January’s outsized gain of 5.3%,” she added.
Four things to watch for on Tuesday:
- Firms in the earnings diary for Tuesday include cybersecurity group Crowdstrike Holdings Inc (NASDAQ:CRWD), insurance firm Lennar Corp (NYSE:LEN) and software specialist Smartsheet Inc (NYSE:SMAR)
- Meanwhile, shares in Reddit favourite AMC Entertainment Holdings Inc (NYSE:AMC) could also draw attention after the firm reopened its theatres in Los Angeles and saw its shares boosted on Monday after a key investor reduced its stake
- Shares in Coca-Cola Co (NYSE:KO) could also get a look in after the firm was initiated with a ‘buy’ rating and US$65 target price by analysts at broker Redburn
- On the macro front, US retail sales for February will be the key focus, while investors may also take interest in industrial and manufacturing production figures as well as the NAHB housing market index for March
Story by ProactiveInvestors
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