U.S. Stocks Swing Lower
13 March 2018 - 5:12PM
Dow Jones News
By David Hodari and Allison Prang
-- U.S. inflation data in focus
-- Indexes turn lower midday
-- Trading calm in Europe, Asia-Pacific
Stocks turned lower midday Tuesday as technology and financial
shares declined.
The Dow Jones Industrial Average fell 97 points, or 0.4%, to
25082. The S&P 500 declined 0.4%, and the tech-heavy Nasdaq
Composite dropped 0.9%.
Tech stocks in the S&P 500 fell by 1%, led by a 4.8% drop in
shares of Qualcomm after President Trump on Monday blocked
Broadcom's $117 billion hostile takeover bid on national security
grounds. Financial stocks fell 0.7%, alongside a decline in bond
yields.
Jonathan Corpina, senior managing partner for Meridian Equity
Partners, said the market has depended on news as a propeller.
"When you get a little bit of a drought, it seems like we get
that pullback," he said, adding that he thinks investors are
"reluctant" to decide which way to go.
The indexes had opened higher and the Dow climbed as much as 197
points earlier in the session after the latest round of inflation
data showed consumer prices increased more modestly in February
than in the previous month.
The consumer-price index, which measures what Americans pay for
everything from shampoo to hotel stays, rose 0.2% in February after
climbing a seasonally adjusted 0.5% in January, the Labor
Department said. Economists surveyed by The Wall Street Journal
expected a 0.2% increase.
Erik Davidson, chief investment officer for Wells Fargo Private
Bank, said the market doesn't have "to fear an extremely aggressive
Fed." He expects the Federal Reserve to stay on track for three
interest-rate increases this year.
"Because of this inflation data this morning...the Fed is not
necessarily going to need to act more quickly," he said.
President Donald Trump also said Tuesday he would nominate CIA
director Mike Pompeo as secretary of state to replace Rex
Tillerson. The inflation data was still the bigger news Tuesday,
observers said, as Wall Street has learned to deal with turnover in
the administration.
"This is now what is expected to be normal," said Matt Miskin,
market strategist at John Hancock Investments.
A lack of inflationary jitters during 2017 allowed U.S. stock
indexes to leap to multiple records early in 2018, while investors
kept long-term bond yields subdued.
Since the start of February, however, rising inflation in both
the U.S. and Europe has prompted investors to second-guess
central-bank guidance, fueling speculation about tighter monetary
policy.
The inflation data was released against a fraught trading
backdrop, with the Trump administration's announcement of tariffs
on steel and aluminum imports having provoked rebukes from China
and the European Union in recent days. How those trading partners
now respond may have broader implications for global economic
growth, analysts say.
"Trade and GDP growth are intimately linked. You've seen a big
pickup in trade in the past six months, but now, that growth rate
is slowing," said Edmund Shing, global head of equity derivative
strategy at BNP Paribas. "The chances of a global recession in the
next year or two are already rising and if you add to that a
slowdown in the rate of trade -- not just a slowdown in trade
growth -- it could have repercussions for global economies."
The yield on U.S. 10-year Treasurys edged down to 2.852%,
according to Tradeweb, from 2.870% on Monday.
Elsewhere, the Stoxx Europe 600 slipped 1%, after Asia-Pacific
indexes shrugged off early pressure.
In Asia, Japanese stocks closed up 0.7%, erasing earlier losses.
The Shanghai Composite fell 0.5% on news that China plans to merge
its banking and insurance regulators.
Kenan Machado contributed to this article.
Write to David Hodari at David.Hodari@dowjones.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
March 13, 2018 12:57 ET (16:57 GMT)
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