Updated: 03-03-2021

The Market at 04:20PM ET
Dow: -121.43… | Nasdaq: -361.04… | S&P: -50.57…
NASDAQ Vol: 5.4 bln… Adv: 1339… Dec: 2598…
NYSE Vol: 1.2 bln… Adv: 1524… Dec: 1683…

Moving the Market

-- Nasdaq and growth stocks were hit by valuation-oriented and rotational selling pressure

-- Treasury yields moved higher amid lingering growth optimism and inflation concerns 

-- White House speeds up vaccine timeline by two months 

-- Energy and financial stocks showed strength 

Sector Watch
Strong: Energy, Financials, Industrials
Weak: Information Technology, Consumer Discretionary, Communication Services

04:20PM ET

[BRIEFING.COM] The S&P 500 fell 1.3% on Wednesday, as the growth stocks continued to face valuation-oriented and rotational headwinds amid a rise in long-term interest rates. The Nasdaq Composite (-2.7%), which has greater exposure to these names, dropped 2.7%. The Russell 2000 declined 1.1%, and the Dow Jones Industrial Average declined 0.4%. 

Long-term interest rates moved higher partly due to lingering growth optimism and pestering inflation concerns. The 10-yr yield rose six basis points to 1.47%, although it settled below its intraday high of 1.50% and well below last week's high of 1.61%. The 2-yr yield increased two basis points to 0.14%. The U.S. Dollar Index increased 0.2% to 90.96.

Growth optimism was linked to new expectations from the Biden administration to have vaccines available for every adult by the end of May, versus prior guidance of July. Inflation concerns stemmed from the February ISM Non-Manufacturing Index showing the Prices Index rise to 71.8% from 64.2% in January.

As it pertained to equities, the higher rates worked against the growth stocks within the S&P 500 information technology (-2.5%), consumer discretionary (-2.4%), and communication services (-1.6%) sectors. The Philadelphia Semiconductor Index fell 3.1%, the Vanguard Mega Cap Growth ETF (MGK 199.71, -5.32, -2.6%) fell 2.6%, and the ARK Innovation ETF (ARKK 125.11, -8.40, -6.3%) fell 6.3%. 

On the flip side, the gains in the cyclical energy (+1.4%), financials (+0.8%), and industrials (+0.1%) sectors were symptomatic of a rotational interest as investors sought areas with direct exposure to the economy. Financial stocks additionally benefited from the curve-steepening activity in the Treasury market; energy stocks followed oil prices ($61.31, +1.52, +2.5%) higher. 

Lyft (LYFT 61.76, +4.70, +8.2%) contributed to the so-called reopening thesis after raising its Q1 adjusted EBITDA loss expectation to $135 million from $145-150 million and observing that average daily ride-shares were up 4% m/m in February despite severe weather. LYFT shares rose 8%. 

A separate note on inflation, the Fed's Beige Book for economic activity in February highlighted that "several districts reported anticipating modest price increases over the next several months." Chicago Fed President Evans (FOMC voter) said he doesn't see inflation as a risk at this point. These observations might have tempered any inflation angst.

For what it's worth, the S&P 500 closed just above its 50-day moving average (3818) despite a weak finish. 

Reviewing Wednesday's economic data:

  • The ISM Non-Manufacturing Index fell to 55.3% in February (Briefing.com consensus 58.6%) from 58.7% in January. The dividing line between expansion and contraction is 50.0%. The February reading marks the ninth straight month of growth for the services sector, but it is the slowest pace since May 2020.
    • The key takeaway from the report for a market focusing increased attention on inflation trends, as economic activity picks up, is the upward move in the Prices Index to 71.8% from 64.2% in January. This elevated reading follows on the heels of Monday's ISM Manufacturing Index, which showed the Prices Index at its highest level (86.0%) since May 2008.
  • The ADP Employment Change report estimated 117,000 jobs were added to private-sector payrolls in February (Briefing.com consensus +180,000) following an upwardly revised 195,000 increase (from 174,000) in January.
  • The IHS Markit Services PMI for February was revised higher to 59.8 from 58.3 in the preliminary reading.
  • The weekly MBA Mortgage Applications Index increased 0.5% following a 11.4% drop in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the revised Q4 readings for Productivity and Unit Labor Costs, and Factory Orders for January on Thursday.

  • Russell 2000 +11.8% YTD
  • Dow Jones Industrial Average +2.2% YTD
  • S&P 500 +1.7% YTD
  • Nasdaq Composite +0.9% YTD
Dow: -121.43… | Nasdaq: -361.04… | S&P: -50.57…
NASDAQ Adv/Dec 1339/2598. …NYSE Adv/Dec 1524/1683.

03:30PM ET

[BRIEFING.COM] The S&P 500 is trading at session lows with a 1.0% decline, while the Russell 2000 clings onto a 0.1% gain.

One last look at the S&P 500 sectors shows information technology (-2.4%), consumer discretionary (-2.0%), and communication services (-1.4%) leading the benchmark index lower amid pronounced weakness in their mega-cap/growth stocks. The energy (+2.3%), financials (+2.4%), and industrials (+0.6%) sectors remain in the green.

WTI crude futures rose 2.5%, or $1.52, to $61.31/bbl.

Dow: +4.92… | Nasdaq: -342.10… | S&P: -36.53…
NASDAQ Adv/Dec 1416/2572. …NYSE Adv/Dec 1642/1565.

02:55PM ET

[BRIEFING.COM] The S&P 500 is trading lower by 0.7% amid continued weakness in the information technology sector (-2.1%), which is most heavily-weighted sector.  

In Fedspeak, Chicago Fed President Evans (FOMC voter) recently reiterated Fed Chair Powell's view that inflation above 2.0% is okay and that he does not see inflation as a risk at this point. The inflation-sensitive 10-yr yield is currently up five basis points to 1.47% after touching 1.50% earlier today. 

Looking ahead, Snowflake (SNOW 250.08, -20.53, -7.6%), Marvell (MRVL 45.98, -1.84, -3.8%), and Splunk (SPLK 144.82, -4.27, -2.9%) are some notable companies that will report earnings after the close. 

Dow: +57.71… | Nasdaq: -280.18… | S&P: -25.65…
NASDAQ Adv/Dec 1475/2508. …NYSE Adv/Dec 1706/1509.

02:30PM ET

[BRIEFING.COM] Both the S&P 500 (-0.88%) and the Nasdaq Composite (-2.45%) tapped session lows in the last half hour following the release of the Fed's March Beige Book; the lead headline out of the Beige Book was news that economic activity expanded modestly across most Districts. The report also found that, on the whole, most businesses remained optimistic about the next 6-12 months as COVID-19 vaccines become more widely distributed.

Other key excerpts from the report detailed that most Districts found employment levels rose over the reporting period, albeit slowly. Constraints on labor supply included those related to COVID-19, childcare, and unemployment benefits. Overall, contacts expect modest improvements in employment levels in the near term.

Further, despite challenges from supply chain disruptions, overall manufacturing activity for most Districts increased moderately from the previous report.

Also, on balance, the Fed found that nonlabor input costs rose moderately over the reporting period, with steel and lumber prices increasing notably.

Dow: +24.90… | Nasdaq: -326.85… | S&P: -33.91…
NASDAQ Adv/Dec 1428/2507. …NYSE Adv/Dec 1664/1555.

01:55PM ET

[BRIEFING.COM] With about two hours to go the tech-heavy Nasdaq Composite (-1.82%) tapped session lows.

Gold futures settled $17.80 lower (-1.0%) to $1,715.80/oz, returning to its losing ways after yesterday's modest gains snapped a five-session losing streak.

The U.S. Dollar Index is less than +0.1% higher to $90.85.

As a reminder, the Fed's Beige Book for March will be reported at the top of the hour.

Dow: +72.89… | Nasdaq: -243.04… | S&P: -23.03…
NASDAQ Adv/Dec 1628/2307. …NYSE Adv/Dec 1777/1442.

01:30PM ET

[BRIEFING.COM] In the last half hour the Dow Jones Industrial Average (+0.49%) tapped session highs.

A look inside the Dow Jones Industrial Average shows that Boeing (BA 234.03, +10.89, +4.88%), American Express (AXP 143.53, +4.28, +3.07%), and Chevron (CVX 105.50, +3.06, +2.99%) are outperforming.

Conversely, San Francisco-based software firm Salesforce (CRM 208.06, -5.41, -2.53%) sits at the bottom of the index, pressured in part by overall weakness in the tech space.

The DJIA now stands +2.05% higher off last Friday's (2/26) lows.

Dow: +154.03… | Nasdaq: -175.25… | S&P: -9.80…
NASDAQ Adv/Dec 1777/2172. …NYSE Adv/Dec 1795/1405.

12:55PM ET

[BRIEFING.COM] The stock market is trading mixed today, with growth stocks underperforming the value/cyclical stocks. The S&P 500 (-0.3%) and Nasdaq Composite (-1.3%) are on the losing end of the trade, while the Dow Jones Industrial Average (+0.3%) and Russell 2000 (+0.3%) are on the winning side. 

From a sector perspective, the information technology sector (-1.4%) is the most influential laggard with a 1.4% decline amid a rise in long-term interest rates. The cyclical energy (+3.1%), financials (+2.1%), and industrials (+1.0%) sectors have provided some offsetting support with strong gains amid some curve-steepening activity and higher oil prices ($61.72, +1.97, +3.3%).

The 10-yr yield is up six basis points to 1.48%, while the 2-yr yield is up two basis points to 0.15%. Rates are up because of lingering growth expectations and inflation angst.

Growth optimism has keyed off expectations from the White House to have vaccines available for every adult by the end of May, versus prior guidance of July. The inflation angst has been exacerbated by the Price Index within the February ISM Services PMI rising to 71.8% from 64.2% in January. The headline Non-Manufacturing Index fell to 55.3% in February (Briefing.com consensus 58.6%) from 58.7% in January. 

In other words, unlike last week when the market was pinned down by rising rates, the market this time around is appreciating the good side of the rate narrative. This has been showcased by the strength in cyclical stocks, but it's hard to gain ground when the heavily-weighted growth stocks are hurting from rotational and valuation-oriented pressures. 

The iShares Russell 1000 Value ETF (IWD 147.31, +1.01, +0.7%) is up 0.7%, versus a 1.6% decline in the iShares Russell 1000 Growth ETF (IWF 238.61, -3.75, -1.6%)

Shares of Lyft (LYFT 62.47, +5.36, +9.4%), meanwhile, are up 9% after the company raised its Q1 adjusted EBITDA loss expectation to $135 million from $145-150 million and observed that average daily ride-shares were up 4% m/m in February despite severe weather. 

Reviewing today's economic data:

  • The ISM Non-Manufacturing Index fell to 55.3% in February (Briefing.com consensus 58.6%) from 58.7% in January. The dividing line between expansion and contraction is 50.0%. The February reading marks the ninth straight month of growth for the services sector, but it is the slowest pace since May 2020.
    • The key takeaway from the report for a market focusing increased attention on inflation trends, as economic activity picks up, is the upward move in the Prices Index to 71.8% from 64.2% in January. This elevated reading follows on the heels of Monday's ISM Manufacturing Index, which showed the Prices Index at its highest level (86.0%) since May 2008.
  • The ADP Employment Change report estimated 117,000 jobs were added to private-sector payrolls in February (Briefing.com consensus +180,000) following an upwardly revised 195,000 increase (from 174,000) in January.
  • The IHS Markit Services PMI for February was revised higher to 59.8 from 58.3 in the preliminary reading.
  • The weekly MBA Mortgage Applications Index increased 0.5% following a 11.4% drop in the prior week.
Dow: +108.23… | Nasdaq: -176.76… | S&P: -12.88…
NASDAQ Adv/Dec 1737/2236. …NYSE Adv/Dec 1778/1421.

12:30PM ET

[BRIEFING.COM] The S&P 500 is trading lower by 0.4%, as the rebound effort loses some steam. Looking at the FAANG stocks shows red across the board.

Netflix (NFLX 528.82, -19.00, -3.5%) is the weakest performer alongside other stay-at-home plays like Zoom Video (ZM 351.45, -21.18, -5.7%) and Peloton (PTON 109.75, -8.20, -7.0%). Amazon (AMZN 3045.00, -49.53, -1.6%), Alphabet (GOOG 2054.05, -21.79, -1.1%), Apple (AAPL 124.05, -1.08, -0.5%), and Facebook (FB 257.70, -1.30, -0.5%) follow suit. 

Elsewhere, shares of Microsoft (MSFT 229.91, -3.96, -1.7%) are down nearly 2% despite Citigroup resuming coverage on the stock with a Buy rating. 

Dow: +59.73… | Nasdaq: -172.36… | S&P: -17.39…
NASDAQ Adv/Dec 1711/2261. …NYSE Adv/Dec 1694/1507.

11:55AM ET

[BRIEFING.COM] The S&P 500 continues to trade lower by 0.1%, while the Nasdaq continues to lag with a 0.8% decline amid relative weakness in the mega-cap/growth stocks. 

Rising long-term interest rates, caused by growth optimism and inflation angst, are weighing on the growth stocks, but the expectations for greater economic growth have offset their weakness. Value/cyclical stocks have benefited from the latter, evidenced by the 0.5% gain in the iShares Russell 1000 Value ETF (IWD 147.08, +0.78, +0.5%).

Overseas, the major European indices closed in positive territory. Germany's DAX gained 0.3%, UK's FTSE gained 0.9%, and France's CAC gained 0.4%. The Europe Stoxx 600 finished unchanged. 

Dow: +122.58… | Nasdaq: -109.43… | S&P: -6.64…
NASDAQ Adv/Dec 1885/2090. …NYSE Adv/Dec 1722/1462.

11:25AM ET

[BRIEFING.COM] The S&P 500 is now trading lower by 0.1% in a buy-the-dip trade. The Dow is up 0.4%, and the Russell 2000 is up 0.5%. 

Lyft (LYFT 62.19, +5.11, +9.0%) is contributing to the lingering reopening optimism today after disclosing in an SEC filing that average daily ride-shares were up 4% m/m in February. In addition, Lyft raised its Q1 adjusted EBITDA loss expectation to $135 million from $145-150 million. LYFT shares are up 9%. 

In stimulus news, reports indicate that President Biden and Senate Democrats have agreed to phase out the $1400 stimulus checks for individuals making $75,000 or less until it reaches income earners of $80,000/year. 

Dow: +146.76… | Nasdaq: -80.30… | S&P: -2.90…
NASDAQ Adv/Dec 1872/2061. …NYSE Adv/Dec 1705/1459.

10:55AM ET

[BRIEFING.COM] The S&P 500 is trading off prior lows (-0.8%) with a current 0.5% decline. The financials (+1.8%), energy (+1.8%), and industrials (+0.4%) sectors have provided positive support. 

Financial stocks are benefiting from the curve-steepening activity in the Treasury market, as longer-dated yields rise faster than shorter-dated ones, while energy sectors are benefiting from higher oil prices ($61.37, +1.63, +2.7%). The 10-yr yield is up seven basis points to 1.49%, versus a 2-bps increase in the 2-yr yield (0.14%). 

On a related note, the EIA recently reported a 21.56 billion build in weekly crude inventories, driven by the Texas freeze.  

Dow: +54.20… | Nasdaq: -150.40… | S&P: -17.90…
NASDAQ Adv/Dec 1564/2355. …NYSE Adv/Dec 1475/1684.

10:25AM ET

[BRIEFING.COM] The S&P 500 is trading lower by 0.5% amid weakness in the information technology (-1.2%), health care (-1.2%), and consumer discretionary (-0.9%) sectors. 

Growth stocks are underperforming for the second straight day, evidenced by the 1.4% decline in the iShares Russell 1000 Growth ETF (IWF 239.10, -3.28, -1.4%). Risk sentiment might be getting clipped by a resurgence in the 10-yr yield, which is up six basis points to 1.48%, although it remains below the 1.61% yield it touched last week. 

Growth and inflation expectations are driving yields higher, this time catalyzed by the White House speeding up its vaccine timeline by two months. Specifically, the administration now expects every adult to have a vaccine available by the end of May, versus prior guidance of July. 

Dow: +50.28… | Nasdaq: -173.46… | S&P: -19.00…
NASDAQ Adv/Dec 1370/2509. …NYSE Adv/Dec 1397/1717.

10:00AM ET

[BRIEFING.COM] The S&P 500 is trading lower by 0.4%, while the Russell 2000 trades higher by 0.1%.

Just in, the ISM Non-Manufacturing Index for January decelerated to 55.3% (Briefing.com consensus 58.6%) from an unrevised 58.7% in January.

The IHS Markit Services PMI for February was revised higher to 59.8 from 58.3 in the preliminary reading.

Dow: +24.69… | Nasdaq: -131.02… | S&P: -17.04…
NASDAQ Adv/Dec 1647/2166. …NYSE Adv/Dec 1453/1593.

09:40AM ET

[BRIEFING.COM] The major indices start the session mixed. The S&P 500 is down 0.1%, and the Nasdaq Composite is down 0.4%. The Dow Jones Industrial Average, however, is up 0.2%. 

Looking at the S&P 500 sectors shows energy (+1.1%) and financials (+0.7%) up the most and extending their recent outperformance. Eight sectors are trading lower, though, including the top-weighted information technology sector (-0.6%).

In the Treasury market, yields are moving higher in a curve-steepening trade caused by selling in longer-dated maturities. The 10-yr yield is up five basis points to 1.47%, and the 2-yr yield is up two basis points to 0.14%. The U.S. Dollar Index is up 0.2% to 90.98. WTI crude is up 1.9% to $60.83/bbl.

Dow: +61.13… | Nasdaq: -46.87… | S&P: -5.59…
NASDAQ Adv/Dec 1901/1801. …NYSE Adv/Dec 1580/1348.

09:14AM ET
[BRIEFING.COM] S&P futures vs fair value: -3.40. Nasdaq futures vs fair value: -53.00.

The stock market is indicated to open mixed following a turnaround in the futures market. Currently, the S&P 500 futures trade four points, or 0.1%, below fair value after trading 0.8% above fair value earlier this morning. 

The positive bias followed an announcement from the White House that it expects every adult to have a vaccine available by the end of May, two months earlier than prior guidance. Buyers appear a bit hesitant, though, amid a bounce in Treasury yields and ADP data showing private-sector payrolls increase less than expected in February.  

The 10-yr yield is currently up five basis points to 1.47% but remains well below the 1.61% yield it touched last week. We'll see if buyers step in after the open, unlike yesterday. 


08:50AM ET
[BRIEFING.COM] S&P futures vs fair value: -12.40. Nasdaq futures vs fair value: -70.80.

The S&P 500 futures have slipped into negative territory and trade 12 points, or 0.3%, below fair value.

Equity indices in the Asia-Pacific region ended the midweek session on a higher note. Expectations are mounting for the People's Bank of China to lower the reserve requirement ratio for some banks later this month. Casinos in Macau are no longer requiring negative coronavirus tests from guests. Japan's government will decide by tomorrow whether to extend the State of Emergency in Tokyo by another two weeks. Australia's Treasurer acknowledged that massive stimulus measures around the world are creating risks to financial stability.

  • In economic data:
    • China's February Caixin Services PMI 51.5 (last 52.0)
    • Japan's February Services PMI 46.3 (last 46.1)
    • Hong Kong's January Retail Sales -13.6% yr/yr (last -13.2%) and February Manufacturing PMI 50.2 (last 47.8)
    • India's February Nikkei Services PMI 55.3 (expected 53.0; last 52.8)
    • Australia's Q4 GDP 3.1% qtr/qtr (expected 2.5%; last 3.4%); -1.1% yr/yr (expected -1.8%; last -3.7%). February AIG Construction Index 57.4 (last 57.6) and February Services PMI 53.4 (last 55.6)
    • New Zealand's January Building Consents 2.1% m/m (last 5.1%)

---Equity Markets---

  • Japan's Nikkei: +0.5%
  • Hong Kong's Hang Seng: +2.7%
  • China's Shanghai Composite: +2.0%
  • India's Sensex: +2.3%
  • South Korea's Kospi: +1.3%
  • Australia's ASX All Ordinaries: +0.8%

Major European indices trade mixed while Spain's IBEX (-0.7%) underperforms amid weakness in construction and energy names. The French Banking Federation is reportedly lobbying for a law to move euro clearinghouses from City of London. Bundesbank President Weidmann said that extended lockdowns in Q2 would delay the region's recovery and that Germany's domestic economy is strong enough to withstand the weak phase. The ECB reportedly has no plans to counter the recent selling in the region's bond market.

  • In economic data:
    • Eurozone's January PPI 1.4% m/m (expected 1.2%; last 0.9%); 0.0% yr/yr (expected -0.4%; last -1.1%). February Services PMI 45.7 (expected 44.7; last 45.4)
    • Germany's February Services PMI 45.7 (expected 45.9; last 46.7)
    • U.K.'s February Services PMI 49.5 (expected 49.7; last 39.5)
    • France's February Services PMI 45.6 (expected 43.6; last 47.3)
    • Italy's February Services PMI 48.8 (expected 46.0; last 44.7). Q4 GDP -1.9% qtr/qtr (expected -2.0%; last 15.9%); -6.6% yr/yr, as expected (last -5.0%)
    • Spain's February Services PMI 43.1 (expected 43.0; last 41.7)
    • Swiss February CPI 0.2% m/m (expected 0.4%; last 0.1%); -0.5% yr/yr (expected -0.3%; last -0.5%)

---Equity Markets---

  • STOXX Europe 600: +0.1%
  • Germany's DAX: -0.2%
  • U.K.'s FTSE 100: +0.1%
  • France's CAC 40: +0.1%
  • Italy's FTSE MIB: -0.3%
  • Spain's IBEX 35: -0.7%

08:26AM ET
[BRIEFING.COM] S&P futures vs fair value: +8.90. Nasdaq futures vs fair value: +29.60.

The S&P 500 futures trade nine points, or 0.2%, below fair value.

The ADP Employment Change report estimated 117,000 jobs were added to private-sector payrolls in February (Briefing.com consensus +180,000) following an upwardly revised 195,000 increase (from 174,000) in January.


07:59AM ET
[BRIEFING.COM] S&P futures vs fair value: +17.60. Nasdaq futures vs fair value: +60.10.

The S&P 500 futures trade 18 points, or 0.5%, above fair value following an announcement from the White House that it now expects every adult to have a vaccine available by the end of May, two months earlier than prior guidance. The futures market, however, has come down from prior highs. 

Despite the moderation in the futures trade, the speedier vaccine timeline has helped improve risk sentiment after the market struggled to attract follow through from buyers yesterday, particularly in the growth stocks and small-caps. Separately, the Senate will open debate on the $1.9 trillion stimulus bill Wednesday and begin an amendment process on Thursday, according to Bloomberg.

Growth-sensitive longer-dated Treasuries are seeing renewed selling pressure, pushing yields back up after a recent pullback. The 10-yr yield is up three basis points to 1.45%, while the 2-yr yield is up one basis point to 0.13%. The U.S. Dollar Index is up 0.1% to 90.89. WTI crude futures are up 1.5%, or $0.91, to $60.66/bbl.

In economic data, investors will receive the ADP Employment Change Report for February (Briefing.com consensus 180,000) at 8:15 a.m. ET, the final IHS Markit Services PMI for February at 9:45 a.m. ET, the ISM Non-Manufacturing Index for February (Briefing.com consensus 58.6%) at 10:00 a.m. ET, and the Fed's Beige Book for March at 2:00 p.m. ET.

The weekly MBA Mortgage Applications Index increased 0.5% following a 11.4% drop in the prior week. 

In U.S. Corporate news:

  • Lyft (LYFT 60.24, +2.94): +5.2% after an 8k filing indicated that average daily ride-shares were up 4% m/m in February and that its adjusted EBITDA forecast for Q1 was improved to a narrower loss due to reduced operating expenses. 
  • Las Vegas Sands (LVS 66.77, +1.82): +2.8% after agreeing to sell Las Vegas properties for $6.25 billion to VICI Properties (VICI 27.90, -0.58, -2.0%) and an affiliate of funds managed by affiliates of Apollo Global Management. 
  • Ross Stores (ROST 114.00, -3.64): -3.1% after missing EPS estimates and guiding Q1 EPS below consensus. 
  • Nordstrom (JWN 36.60, -0.98): -2.6% after missing top and bottom-line estimates. 
  • Microsoft (MSFT 234.45, +0.58): +0.3% after the stock was resumed with a Buy rating at Citigroup.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a higher note. Japan's Nikkei: +0.5% Hong Kong's Hang Seng: +2.7% China's Shanghai Composite: +2.0% India's Sensex: +2.3% South Korea's Kospi: +1.3% Australia's ASX All Ordinaries: +0.8%.
    • In economic data:
      • China's February Caixin Services PMI 51.5 (last 52.0)
      • Japan's February Services PMI 46.3 (last 46.1)
      • Hong Kong's January Retail Sales -13.6% yr/yr (last -13.2%) and February Manufacturing PMI 50.2 (last 47.8)
      • India's February Nikkei Services PMI 55.3 (expected 53.0; last 52.8)Australia's Q4 GDP 3.1% qtr/qtr (expected 2.5%; last 3.4%); -1.1% yr/yr (expected -1.8%; last -3.7%). February AIG Construction Index 57.4 (last 57.6) and February Services PMI 53.4 (last 55.6)
      • New Zealand's January Building Consents 2.1% m/m (last 5.1%)
    • In news:
      • Expectations are mounting for the People's Bank of China to lower the reserve requirement ratio for some banks later this month.
      • Casinos in Macau are no longer requiring negative coronavirus tests from guests.
      • Japan's government will decide by tomorrow whether to extend the State of Emergency in Tokyo by another two weeks.
      • Australia's Treasurer acknowledged that massive stimulus measures around the world are creating risks to financial stability.
  • Major European indices trade firmly higher while Spain's IBEX (-0.2%) underperforms amid weakness in construction and energy names. STOXX Europe 600: +0.4% Germany's DAX: +0.9% U.K.'s FTSE 100: +0.8% France's CAC 40: +0.6% Italy's FTSE MIB: +0.6% Spain's IBEX 35: -0.2%.
    • In economic data:
      • Eurozone's January PPI 1.4% m/m (expected 1.2%; last 0.9%); 0.0% yr/yr (expected -0.4%; last -1.1%). February Services PMI 45.7 (expected 44.7; last 45.4)
      • Germany's February Services PMI 45.7 (expected 45.9; last 46.7)
      • U.K.'s February Services PMI 49.5 (expected 49.7; last 39.5)
      • France's February Services PMI 45.6 (expected 43.6; last 47.3)
      • Italy's February Services PMI 48.8 (expected 46.0; last 44.7). Q4 GDP -1.9% qtr/qtr (expected -2.0%; last 15.9%); -6.6% yr/yr, as expected (last -5.0%)
      • Spain's February Services PMI 43.1 (expected 43.0; last 41.7)
      • Swiss February CPI 0.2% m/m (expected 0.4%; last 0.1%); -0.5% yr/yr (expected -0.3%; last -0.5%)
    • In news:
      • The French Banking Federation is reportedly lobbying for a law to move euro clearinghouses from City of London.
      • Bundesbank President Weidmann said that extended lockdowns in Q2 would delay the region's recovery and that Germany's domestic economy is strong enough to withstand the weak phase.
      • The ECB reportedly has no plans to counter the recent selling in the region's bond market.

07:27AM ET
[BRIEFING.COM] S&P futures vs fair value: +22.90. Nasdaq futures vs fair value: +73.50.

06:54AM ET
[BRIEFING.COM] S&P futures vs fair value: +23.30. Nasdaq futures vs fair value: +93.30.

06:54AM ET
[BRIEFING.COM] Nikkei...29408...+150.90...+0.50%.  Hang Seng...29096...+784.60...+2.80%.

06:54AM ET
[BRIEFING.COM] FTSE...6677.60...+63.90...+1.00%.  DAX...14073...+128.30...+0.90%.

04:20PM ET

[BRIEFING.COM] The S&P 500 declined 0.8% on Tuesday, retracing some of yesterday's rally, as the market struggled to attract follow-through buyers. The Dow Jones Industrial Average declined 0.5%, while the Nasdaq Composite (-1.7%) and Russell 2000 (-1.9%) fell more than 1.5%. 

Most of the 11 S&P 500 sectors wavered between gains and losses today, but ten of them closed in negative territory amid a weak finish. The information technology (-1.6%) and consumer discretionary (-1.3%) sectors were influential laggards throughout the session, while the materials sector (+0.6%) was the one sector that closed higher. The Philadelphia Semiconductor Index fell 3.1%. 

The disappointing price action in Zoom Video (ZM 372.79, -36.87, -9.0%) following its better-than-expected earnings report and upbeat guidance was cited as a profit-taking influence for the technology/growth stocks. ZM shares dropped 9% after starting the day higher by more than 7%. C3.ai (AI 98.50, -22.55, -18.6%), a smaller growth stock, dropped 19% after earnings.

Target (TGT 173.49, -12.60, -6.8%) had similar price action to Zoom, with shares giving up an early 4% gain and closing lower by 7% despite reporting strong quarterly results. 

Other headwinds for the market included technical resistance at the 3900 level for the S&P 500, media reports continuing to highlight emerging coronavirus variants, and their potential resistance to vaccines, and China's top banking regulator warning about elevated valuations of global equity markets.

The Covid-variant reports might have overshadowed news that businesses in Texas will open at 100% capacity and that indoor dining in Chicago will expand to 50% capacity from 40%. Regrading valuations, Fed Governor Brainard (FOMC voter) acknowledged that are some signs of stretched asset valuations, but she didn't think they are broad-based.

Ms. Brainard added that last week's slide in Treasuries caught her eye and that conditions for tapering bond purchases will not be met for "some time." Longer-dated Treasury yields continued to pull back from last week's levels. 

The 10-yr yield decreased three basis points to 1.42%, while the 2-yr yield was unchanged at 0.12%. The U.S. Dollar Index decreased 0.3% to 90.77. WTI crude futures decreased 1.2%, or $0.75, to $59.79/bbl.

Investors did not receive any economic data of note on Tuesday. Looking ahead to Wednesday, investors will receive the ISM Non-Manufacturing Index for February, the ADP Employment Change report for February, the final IHS Markit Services PMI for February, the Fed's Beige Book for March, and the weekly MBA Mortgage Applications Index.

  • Russell 2000 +13.0% YTD
  • Nasdaq Composite +3.7% YTD
  • S&P 500 +3.0% YTD
  • Dow Jones Industrial Average +2.6% YTD
Dow: -143.99… | Nasdaq: -230.04… | S&P: -31.53…
NASDAQ Adv/Dec 1131/2846. …NYSE Adv/Dec 1359/1839.

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