United States indices end lower to end multi-month win streak

Fredrick Soto
March 7, 2018

The move raised the threat of escalating retaliation by other countries and higher inflation.

Stocks slumped on Wednesday, breaking the longest streak of positive monthly returns in the history of the Standard & Poor's 500 index. "And so I think that's what the market has been fearing for a while now". "But this is exactly what candidate Trump said he would do: He said he would be very protectionist and America First". Heavy equipment maker Caterpillar lost $3.12, or 2 percent, to $151.54 and aerospace giant Boeing gave back $8.59, or 2.4 percent, to $353.70.

Best Buy has been one of the best performing retail stocks over the last few years.

The Dow Jones Industrial Average .DJI fell 380.83 points, or 1.5 percent, to 25,029.2, the S&P 500 .SPX lost 30.45 points, or 1.11 percent, to 2,713.83 and the Nasdaq Composite .IXIC dropped 57.35 points, or 0.78 percent, to 7,273.01. Apple, the most valuable US company, got 63 percent of its sales from outside the United States in its latest fiscal year. The head of the European Commission said the region would respond in kind.

About 8.1 billion shares changed hands on US exchanges.

Shares of USA steel makers - AK SteelAKS.N, US SteelCorp X.N and NucorNUE.N - jumped on prospects of importtariffs. But shares of companies that use lots of steel fell, as did exporters. The Nasdaq composite fell 127 points, or 1.8 percent, to 7,142.

Health care (-1.6%) also lagged, with Celgene plunging 9% to its lowest level in more than three years after receiving a refusal to file letter from the FDA about a multiple sclerosis drug candidate. It accelerated in the last half hour of trading and ended at 2,691.25, up 13.58 points, or 0.5 percent.

Bond prices rose as demand jumped for safer investments, which pushed yields lower.

This also lifted the yield for USA 10 year government bonds, a global benchmark for commercial lending, past a four-year high of 2.92 per cent.

USA stock-market indexes switched between gains and losses on Thursday, after Federal Reserve chief Jerome Powell said he saw no signs of significant wage inflation as he testified before a Senate committee.

"We have seen some data that in my case will add some confidence to my view that inflation is moving up to target", Powell said.

Earlier in the week, he helped send Treasury yields jumping and stocks tumbling when he said that he's feeling more optimistic about the economy. Concerns about the possibility of higher inflation and interest rates have rocked markets since the S&P 500 set its latest record high in late January.

Worries about potentially higher rates and inflation have reintroduced markets to volatility following their unusually calm run in 2017 and early this year. The Dow took the worst of the punishment with losses over 300 points.

Dental products supplier Patterson Companies plunged 23 percent in the first few minutes of trading Thursday after issuing weak quarterly results.

Energy (-2.3%) was the weakest of the S&P 11 industry groups, moving lower alongside the price of crude oil after the weekly US crude oil inventory report showed inventories rising by 3M barrels last week; April WTI futures dropped 2.2% to $61.64/bbl. Brent crude, the worldwide standard, rose 54 cents to $64.37 a barrel.

On the commodities front, oil has dropped slightly and gold is also down. The euro rose to $1.2255 from $1.2203, and the British pound slipped to $1.3768 from $1.3771.

The ASX 200 year to date was down 0.8% at the end of February - yesterday's fall took that to 1.5% and today's drop could push it well past 2%.

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