With little in the way of news on both the equity and economic fronts, uncertainty surrounding the geopolitical landscape appeared to drive U.S. equities lower in another volatile session. Treasury yields continued to move lower and the U.S. dollar lost ground, while crude oil prices showed some signs of resiliency, getting a slight lift on headlines regarding a possible discussion of an expansion of OPEC production cuts, and gold jumped.
The Dow Jones Industrial Average (DJIA) fell 7 points to 20,658, the S&P 500 Index lost 7 points (0.3%) to 2,357, and the NASDAQ Composite declined 25 points (0.4%) to 5,881. In moderate volume, 781 million shares were traded on the NYSE and 1.8 billion shares changed hands on the NASDAQ. WTI crude oil rose $0.32 to $53.40 per barrel and wholesale gasoline was unchanged at $1.76 per gallon. Elsewhere, the Bloomberg gold spot price jumped $18.14 higher to $1,272.82 per ounce, and the dollar index, a comparison of the U.S. dollar to six major world currencies, was 0.3% lower at 100.73.
Loews Corp. (NYSE:L $47) announced an agreement to acquire Consolidated Container Co. from Bain Capital Private Equity for about $1.2 billion. L traded lower.
Shares of Hub Group Inc (NASDAQ:HUBG) $41) were sharply lower after the full-service transportation company preannounced that it expects 1Q and full-year earnings-per-share (EPS) to come in well below the FactSet estimates. The company said it is experiencing a soft pricing environment due primarily to excess truck capacity and extraordinarily aggressive intermodal pricing.
Qualcomm Inc (NASDAQ:QCOM $55) announced a countersuit against Dow member Apple Inc. (NASDAQ:AAPL $142) alleging the iPhone maker breached contractual pledges, mischaracterized their agreements and misrepresented facts. The countersuit comes after AAPL launched a lawsuit in January against QCOM regarding how it charges royalties for using its mobile phone technology. Apple has not commented. Shares of both companies were lower.
Small business optimism edges lower, job openings rise
The National Federation of Independent Business (NFIB) Small Business Optimism Index for March dipped to 104.7 from February's 105.3 level, matching the Bloomberg estimate.
The Labor Department's Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, rose to a level of 5.74 million jobs available to be filled in February, from January's 5.63 million level, and above forecasts of 5.65 million. The hiring rate dipped to 3.6% from January's 3.7% rate, as did the separation rate to 3.5% from 3.6%.
Treasuries finished higher, as the yield on the 2-Year note declined 3 basis points (bps) to 1.24%, while the yields on the 10-Year note and the 30-Year bond fell 5 bps to 2.31% and 2.94%, respectively.
Bond yields have moved lower as of late, amid Fed and political uncertainty both here and abroad, as well as continued signs of steady economic growth and flared-up geopolitical tensions. Financials have retreated in the wake of the slide in yields, contributing to the recent soft patch in the stock markets after a strong post-election rally. Much of the pick-up in economic growth, as well as the earnings turn, pre-dated the election and shouldn't be fully credited to President Trump.
Financials are set to unofficially kick off 1Q earnings season later this week. Per data compiled by FactSet, the financials sector is expected to report the highest year-over-year (y/y) earnings growth of all eleven sectors at 14.3%, leading to the projected 8.9% growth for the S&P 500, a rate that would be the highest since 4Q 2013.
Tomorrow's economic calendar will offer investors a look at the Import Price Index, forecasted to have fallen 0.2% m/m during March following the 0.2% increase the month prior, as well as MBA Mortgage Applications.
Europe and Asia mixed on data and geopolitical concerns
European equities finished mixed, with the global markets remaining uneasy amid heightened geopolitical tensions toward Syria and North Korea, while G-7 foreign ministers met for a second day. Technology and financials weighed on the markets, along with a modest pullback in basic materials, while oil & gas issues overcame early losses despite intra-day weakness in crude oil prices after a recent rally.
German investor confidence improved more than estimated for April, while Eurozone industrial production unexpectedly declined and UK inflation statistics were mixed. The euro and British pound finished higher versus the U.S. dollar, while bond yields in the region traded mixed.
Stocks in Asia finished mixed amid continued geopolitical concerns that have been exacerbated by tensions toward North Korea and last week's U.S. missile strikes in Syria, along with resurfacing concerns about ramped up regulations of the financial markets within China.
Japanese equities declined, with the yen gaining ground to weigh on the markets, while mainland Chinese shares advanced, but those traded in Hong Kong, as well as South Korea declined. Strength in oil & gas and financial stocks supported Australia's markets, which overshadowed a dip in the nation's business confidence for March, and India's bourse snapped a string of losses that have trimmed the nation's record run that has given emerging markets a boost in 2017.
Tomorrow, the international economic calendar will offer the unemployment rate from South Korea, CPI and industrial production from India, consumer prices and lending statistics from Japan, consumer confidence from Australia, CPI and PPI from China, employment data from the UK, and CPI from Spain.