The stock market ended Wednesday on a lower note with the Dow (-1.3%), Nasdaq (-1.3%), and S&P 500 (-1.2%) recording comparable losses while the Russell 2000 (-1.7%) finished behind the large cap indices.
Equities spent the bulk of the session in the red, as the S&P 500 gravitated back below its 200-day moving average (4474), which offered support yesterday, while the Nasdaq made a brief appearance in the green in midday trade before reaching a fresh low ahead of the close.
Crude oil recovered its entire loss from yesterday, rising $5.78, or 5.3%, to $115.26/bbl. The resilience in the commodity weighed on overall sentiment, but it also kept the energy sector (+1.7%) atop today’s leaderboard throughout the day. The sector extended this week’s gain to 4.9% with ten of its components reaching fresh 52-week highs.
The utilities sector (+0.2%) was the only other advancer, benefiting from the cautious sentiment in the broader market.
On the downside, nine sectors recorded losses with six surrendering at least 1.0%. Financials (-1.8%) and health care (-1.8%) lagged throughout the day due to broad weakness. Wells Fargo ( WFC 51.12, -2.27, -4.3%) was the worst performer among financials while ResMed ( RMD 233.00, -22.05, -8.7%) was the biggest laggard in health care amid supply chain concerns.
Top-weighted technology (-1.5%) finished near the bottom of the leaderboard even though its largest component- Apple ( AAPL 170.17, +1.35, +0.8%)-recorded a solid gain. Chipmakers displayed relative weakness with the PHLX Semiconductor Index sliding 2.5%, while Adobe ( ADBE 422.90, -43.55, -9.3%) finished at the bottom of the tech sector after its Q1 beat was overshadowed by below-consensus EPS and revenue guidance for Q2.
In other earnings, General Mills ( GIS 64.23, +1.55, +2.5%) beat Q3 EPS expectations and raised its FY22 EPS guidance above consensus. Archer-Daniels ( ADM 89.09, +1.53, +1.8%) rallied to a fresh record in sympathy with General Mills, but the consumer staples sector still lost 0.9%.
Treasuries ended the day in positive territory with the 10-yr note reclaiming its loss from yesterday and sending its yield lower by five basis points to 2.32%.
In international news, President Biden traveled to meet with European NATO allies in the coming days.
Reviewing today’s economic data:
- New home sales decreased 2.0% month-over-month in February to a seasonally adjusted annual rate of 772,000 units (Briefing.com consensus 820,000) from a downwardly revised 788,000 (from 801,000) in January. On a year-over-year basis, new home sales were down 6.2%.
- The key takeaway from the report is the recognition that the sale of lower-priced homes has lessened as a percentage of overall sales, likely due to less supply resulting from cost pressures for builders and emerging pressures from rising mortgage rates that are reducing affordability for lower-income buyers. That is leading to higher-priced homes accounting for a larger percentage of new homes sold, which is driving up both median and average selling prices.
- The weekly MBA Mortgage Index fell 8.1% after decreasing by 1.2% during the previous week. The Purchase Index fell 1.5% while the Refinance Index fell 14.4%.
Weekly Initial Claims (Briefing.com consensus 210,000; prior 214,000), Continuing Claims (prior 1.419 mln), February Durable Orders (Briefing.com consensus -0.5%; prior 1.6%), Durable Orders ex-transportation (Briefing.com consensus 0.5%; prior 0.7%), and Q4 Current Account Balance (prior -$214.80 bln) will be reported tomorrow at 8:30 ET, followed by the preliminary March IHS Markit Manufacturing PMI (prior 57.3) at 9:45 ET
- Dow Jones Industrial Average -5.5% YTD
- S&P 500 -6.5% YTD
- Russell 2000 -8.6% YTD
- Nasdaq Composite -11.0% YTD
Overseas:
- Europe: DAX -1.3%, FTSE -0.2%, CAC -1.2%
- Asia: Nikkei +3.0%, Hang Seng +1.2%, Shanghai +0.3%
Commodities:
- Crude Oil +5.78 @ 115.26
- Nat Gas +0.04 @ 5.26
- Gold +14.00 @ 1936.30
- Silver +0.23 @ 25.16
- Copper +0.07 @ 4.78