Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stocks Recover Most Early Losses In Mixed Finish

Published 03/28/2017, 03:50 AM
Updated 07/09/2023, 06:31 AM

Stocks Recover Most Early Losses in Mixed Finish

U.S. stocks pared early losses and finished the regular trading session mixed with health-care shares leading the advance and financial listings lagging. Treasury yields and the U.S. dollar declined, crude oil prices were mixed and gold traded higher. In light economic news, some regional manufacturing activity slowed, but remained in expansion territory. Meanwhile, Cal-Maine Foods reported earnings, while DuPont (NYSE:DD) and Dow Chemical (NYSE:DOW) received approval from the European Commission regarding their previously announced merger.

The Dow Jones Industrial Average (DJIA) lost 45 points (0.2%) to 20,551 and the S&P 500 Index shed 2 points (0.1%) to 2,342, while the NASDAQ Composite was 12 points (0.2%) higher at 5,840. In moderate volume, 826 million shares were traded on the NYSE and 1.7 billion shares changed hands on the NASDAQ. WTI crude oil ticked $0.24 lower to $47.73 per barrel and wholesale gasoline gained $0.01 to $1.63 per gallon. Elsewhere, the Bloomberg gold spot price increased $11.29 to $1,254.86 per ounce, and the dollar index, a comparison of the U.S. dollar to six major world currencies, declined 0.4% to 99.19.

Cal-Maine Foods Inc (NASDAQ:CALM $38) reported fiscal 3Q earnings-per-share (EPS) of $0.09, well below the $0.19 FactSet estimate, as revenues fell 31.8% year-over-year (y/y) to $307 million, below the projected $325 million. The company said its results were affected by lower market prices and weaker demand trends y/y, reflecting the volatile market conditions in the egg industry. Shares overcame early weakness and closed higher.

Dow member DuPont (DD $81) and Dow Chemical Co. (DOW $64) received approval from the European Commission regarding their planned merger, with some divestment conditions. The deal still needs approval from U.S. regulators. Shares of both companies finished higher.

Weatherford International PLC (NYSE:WFT $6) rallied after announcing a joint venture with Schlumberger NV (NYSE:SLB $77) called OneStim to deliver products and services for the development of unconventional resource plays in the U.S. and Canada land markets. SLB ticked higher.

Sealed Air Corp. (NYSE:SEE $44) fell after announcing the sale of its Diversey Care division and the food hygiene and cleaning business within its Food Care unit to Bain Capital Private Equity for about $3.2 billion. The company also announced a $1.5 billion increase to its share repurchase program. Analysts are noting that the $2.5 billion the company expects to receive in net proceeds from the transaction were a bit lighter than had been anticipated.

Regional manufacturing growth slows, with economic calendar set to heat up

The Dallas Fed Manufacturing Activity Index slowed more than expected but remained solidly at a level depicting expansion (a reading above zero), dropping to 16.9 in March, from 24.5 in February, the highest level since April 2006, and compared to the expected decline to 22.0.

Treasuries were higher, with the yield on the 2-year note nearly unchanged at 1.25%, the yield on the 10-year note dropping 4 basis points (bps) to 2.37%, and the 30-year bond rate decreasing 3 bps to 2.98%.

Treasury yields and the U.S. dollar have been under pressure as of late, and stocks pulled back from all-time highs, despite continued solid economic data, with the markets grappling with festering political uncertainty on both sides of the pond, exacerbated by last week's failed healthcare reform in the U.S. The greenback and bond yields have seen pressure despite this month's Fed rate hike, which included an apparent dovish tone and outlook for future rate increases that calmed concerns of accelerated hikes.

The U.S. economic calendar will be relatively busy for the remainder of the week. A report that will likely garner a fair amount of attention is Thursday's release of the third and final read on 4Q GDP.

Reports expected include the advanced goods trade balance, forecasted to show that the deficit narrowed to $66.4 billion in February from $68.8 billion the month prior, and Consumer Confidence, expected to move to a level of 114.0 for March from the 114.8 registered in February. Additional releases will include the Richmond Fed Manufacturing Index, anticipated to have ticked lower to 15 from 17 in March (a reading above zero indicates expansion in activity) and the S&P CoreLogic Case-Shiller Home Price Index.

Europe and Asia lower as politics continued to stymie sentiment

European equities finished lower, with basic materials leading to the downside as the pullback in the global markets persisted. Political uneasiness continued to fester, bolstered by last week's failed U.S. healthcare reform measures, which appeared to foster concerns about the implications for President Trump to get his business-friendly agenda through Congress. Moreover, next month's key French election looms, U.K. Brexit concerns lingered as the nation is expected to trigger article 50 this week to formally begin negotiations to leave the European Union, and German regional elections showed positive results for Chancellor Angela Merkel.

The political front overshadowed a positive read on German business sentiment, which improved to the highest level since July 2011. The euro and British pound rallied as the U.S. dollar continued a slide, while bond yields in the region finished lower.

Stocks in Asia finished mostly lower, with global political uncertainty lingering and volatility accelerating, exacerbated by last week's failed healthcare reform efforts in the U.S. Also, the markets may have been looking to some key Chinese economic data later in the week. The yen rallied to weigh on Japanese equities, while stocks trading in South Korea and India declined. Mainland Chinese shares and those trading in Hong Kong both dipped and Australian securities were also lower.

Tomorrow, the international economic calendar will be light, offering a consumer confidence read from Australia and industrial orders from Italy.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.