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Wall Street dips as Fed meeting kicks off

EconomyMar 16, 2021 03:10PM ET
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© Reuters. FILE PHOTO: The front facade of the NYSE is seen in New York

By Noel Randewich

(Reuters) - Wall Street dipped on Tuesday, pulled lower by energy stocks and threatening to put an end to a recent rally, while investors awaited the result of the Federal Reserve's two-day policy meeting.

The Nasdaq turned negative in afternoon trading after earlier touching a two-week high.

The S&P 500 and Dow Jones Industrial Average closed at record highs in the prior session as optimism about a $1.9 trillion fiscal stimulus package and ongoing vaccination drives bolstered views that the economy was on a path to recovery.

However, stimulus and improving economic data have recently stoked inflation worries, pushing up yields and upending equity markets in February.

Wall Street's fear gauge hit a five-week low at 19.68 points as yields on the benchmark U.S. 10-year Treasury slipped for the second straight session to 1.59% from a 13-month high hit last week.

Fears about an overheating economy and a jump-forward in interest rate expectations have increased scrutiny on the Fed meeting, where policymakers are likely to raise economic forecasts and repeat their pledge to remain accommodative for the foreseeable future.

Investors have slightly increased their cash allocation, deeming that inflation and 'taper tantrums' could topple the record rally in financial markets, BofA's March fund manager survey showed on Tuesday.

"This Fed meeting is one of the most important ones for the market in a long time. It is the first we have had after the recent inflation rate rise and concerns about inflation," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.

Data showed retail sales dropped more than expected in February due to bitterly cold weather across the country. Another report indicated winter storms in Texas led to a plunge in U.S. factory output last month.

At midafternoon, the Dow Jones Industrial Average was down 0.45% at 32,805.03 points, while the S&P 500 lost 0.28% to 3,957.79.

The Nasdaq Composite dropped 0.18% to 13,435.18.

Energy stocks slumped 2.4% after a drop in oil prices while financials retreated about 1%. Technology and communication services jumped about 0.5% and 0.7%, respectively.

The Russell growth index was marginally higher versus the Russell value index's 0.7% fall, in a slight reversal of a recent trend away from technology and other high-growth stocks.

Ford Motor (NYSE:F) Co dropped over 4% after announcing a $2 billion convertible debt deal.

Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored decliners.

The S&P 500 posted 72 new 52-week highs and no new lows; the Nasdaq Composite recorded 214 new highs and 13 new lows.

Wall Street dips as Fed meeting kicks off
 

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Comments (2)
Jacob Steinschlag
Jacob Steinschlag Mar 16, 2021 3:54PM ET
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the reason was that nasdaq futures longs were simply being opened on mass although there was a nasdaq selloff since market open today. the sell volume today has been constantly twice the buying volume since open. nasdaq should be around -1%. all the futures traders do now have to cover their longs and nasdaq is dipping due to the sell-off.
Mitchel Pioneer
Mitchel Pioneer Mar 16, 2021 11:05AM ET
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With clockwork precision, here comes the 11AM "buyers" to save the greatest financial fraud in the world.
Todd Gray
Todd Gray Mar 16, 2021 11:05AM ET
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Don't remember which, but one Ivy league university wrote a paper acknowledging for two generations higher education removed traditional moral imperatives, and replaced them with a doctrine the produces narcissism, and greed. What that means in economics, is academia has become like zombie cannibals, devouring everyone they can. They even slip into your home through the internet, and plot to invegel you out of every dollar, without caring about what happens to you and your family. True insanity.
Amine Fourali
Amine Fourali Mar 16, 2021 11:05AM ET
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The biggest casino in the world sponsored by the Cemtral Banks...stocks, cryptos...
Jacob Steinschlag
Jacob Steinschlag Mar 16, 2021 11:05AM ET
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reported for spamming
 
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