MARKET SNAPSHOT: U.S. Stocks Lower Amid Low Trading Volumes, Weak Durable-goods Orders

By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Durable-goods orders drop in February; Kraft, Kofex up on M&A news

NEW YORK (MarketWatch) -- U.S. stocks drifted lower Wednesday, declining for the third straight session as investors assessed weaker-than-expected durable-goods orders and focused on the merger between Kraft and Heinz.

The S&P 500 (SPX) was off by 3 points, or 0.2%, at 2,088, with five of its 10 main sectors trading lower. The Dow Jones Industrial Average (DJI) shed about 50 points, or 0.3%, falling to 17,962. The Nasdaq Composite (RIXF) fell the most 29 points, down 0.6%, at 4,967.89.

NYSE Composite volume on Tuesday was the fourth lowest this year. Analysts at Credit Suisse said Tuesday's volumes were 2% below Monday's dismal level.

Dan Greenhaus, chief global strategist at BTIG, said the market is still digesting economic reports news in the wake of a Federal Reserve that said it would be "data dependent" in determining the pace of its first rate hike in nine years.

"Investors are waiting for the jobs report due on Friday and seem to have been giving a pass to fairly poor data over the past month. Today's durable-goods orders were in line with poor data of late, which suggest that the first-quarter GDP will be weak," Greenhaus said.

Orders for durable U.S. goods (http://www.marketwatch.com/story/february-durable-goods-orders-drop-14-in-weak-report-all-around-2015-03-25) fell in February, suggesting businesses remain reluctant to invest more aggressively, however market reaction to the release was muted.

Charles Evans, president of the Chicago Federal Reserve, speaking to press after a speech in London, warned that global uncertainty is the biggest risk to the U.S. economy, advocating interest rates stay low until 2016.

Sleeping giant: Tuesday's CPI data did help the dollar to stabilize, which in turn weighed on stocks. Stan Shamu, market strategist at IG, said many are waiting to see how long the dollar can "remain at bay before resuming its run."

"It's almost as if the U.S. dollar is a sleeping giant at the moment, and we probably won't be seeing much volatility in equities either until it awakes," said Shamu in a note.

The dollar (DXY) shifted slightly lower Wednesday after data showed German business confidence rose in March (http://www.marketwatch.com/story/ifo-german-business-confidence-rises-again-2015-03-25) for the fifth straight month, hitting its highest level since July 2014.

Stocks to Watch: Shares of Kraft Foods Group Inc.(KRFT) surged 35% in thin premarket activity after a merger was announced with H.J. Heinz Company (http://www.marketwatch.com/story/kraft-and-heinz-to-merge-in-deal-to-create-company-with-revenue-of-28-billion-2015-03-25).

Shares of Kofax Ltd.(KFX) were up 46% in premarket after the software company agreed to be acquired by Lexmark International (LXK) late Tuesday.

Earnings from Red Hat Inc.(RHT)Apollo Education(APOL), PVH Corp.(PVH) and Paychex Inc.(PAYX) are expected on Wednesday.

Other markets: European stocks edged lower. In Asia, the Shanghai Composite Index snapped a 10-day winning streak, and the Japan Nikkei 225 index edged up 0.2%.

Oil prices (CLK5) were higher ahead of crude-stockpile data from the U.S. Energy Information Administration due later. Late Tuesday, the American Petroleum Institute, an industry group, said its data for last week showed a 4.8-million-barrel gain in crude-oil supplies. Gold prices (GCK5) were moderately higher.

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