Concern about Russia’s antics and China’s exports sent stocks lower on Monday.
Investors remained cautious on Monday, as Russia began to amass troops in Crimea ahead of the region’s “election” on March 16. China helped contribute to the gloom, as Saturday’s report that Chinese exports sank in February stoked anxiety about the state of the global economy, sending stocks moderately lower.
The Dow Jones Industrial Average (DIA) lost 34 points to finish Monday’s trading session at 16,418 for a 0.21 percent decline. The S&P 500 (SPY) dipped 0.05 percent to 1,877.
The Nasdaq 100 (QQQ) advanced 0.08 percent to finish at 3,706. The Russell 2000 (IWM) declined 0.23 percent to 1,200.
On London’s ICE Futures Europe Exchange, May futures for Brent crude oil declined $1.11 (1.02 percent) to $107.35/bbl. (BNO).
April gold futures declined $1.60 (0.12 percent) to $1,339.80 per ounce (GLD).
The transportation sector got stuck in traffic during Monday’s trading session, as the Dow Jones Transportation Average declined 0.16 percent to 7,580 (IYT).
In Japan, disappointing economic data upstaged the exchange rate for the yen as the dominant factor in stock market activity on Monday. The nation’s GDP expansion during the fourth quarter of 2013 fell short of expectations, reaching only 0.70 percent. The result indicated a retreat from the preliminary estimate of 1.0 percent growth and it fell short of economists’ expectations for 0.90 percent expansion.
Japan’s Ministry of Finance had more bad news on Monday. The nation’s current account deficit expanded to the equivalent of over $15 billion – its highest level in almost 30 years. Meanwhile, the exchange rate for the yen remained relatively unchanged, trading at 103.05 per dollar during the last ten minutes of Monday’s trading session in Tokyo (FXY). The Nikkei 225 Stock Average sank 1.01 percent to 15,120 (EWJ).
In China, Saturday’s release of the nation’s trade balance report brought bad news. The nation’s exports decreased by 18.1 percent on a year-over-year basis in February, resulting in a trade deficit. The awful report is expected to put pressure on the People’s Bank of China to weaken the yuan. The report re-ignited concerns about the state of the global economy, sending the spot price of copper 1.62 percent lower (after a 4.27 percent nosedive on Friday) to $3.03 per pound.
The Shanghai Composite Index sank 2.86 percent to 1,999 (FXI). Hong Kong’s Hang Seng Index fell 1.75 percent to 22,264 (EWH).
The bad news from China caused mining companies to drag the major European stock indices lower. Ongoing tension over Russia’s plans for Crimea kept European investors in a risk-averse mood. The Euro STOXX 50 Index finished Monday’s session with a 0.08 percent dip to 3,092.79 – remaining just a whisker above its 50-day moving average of 3,092.38. Its Relative Strength Index is 48.12 (FEZ).
Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,827 on Monday, despite taking a 0.05 percent dip to 1,877. Its Relative Strength Index (RSI) declined from 66.40 to 65.92. The MACD and the signal line are both climbing above the zero line, suggesting that the S&P could resume its advance during the immediate future.
On Monday, four sectors advanced and five sectors declined. The industrial sector took the hardest hit, falling 0.43 percent.
Consumer Discretionary (XLY): -0.27%
Technology: (XLK): -0.16%
Industrials (XLI): -0.43%
Materials: (XLB): -0.08%
Energy (XLE): +0.16%
Financials: (XLF): +0.04%
Utilities (XLU): -0.25%
Health Care: (XLV): +0.42%
Consumer Staples (XLP): +0.09%
Bottom line: Russia’s Crimean adventure combined with disappointing export data from China to send stocks moderately lower on Monday.
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