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Wall Street closed mixed after a choppy trading session on Wednesday. Investors were assessing the developments on geopolitical crisis between Russia and Ukraine. Market participants were also digesting minutes of Fed’s January FOMC. The Dow and the Nasdaq Composite ended in red while the S&P 500 managed to finish in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% to close at 34,934.27. Notably, 13 components of the 30-stock index ended in green while 17 in red. The tech-heavy Nasdaq Composite finished at 14,124.09, sliding 0.1% due to the weak performance of large-cap stocks.
However, the S&P 500 rose 0.1% to end at 4,475.01. Nine out of eleven sectors of the benchmark index closed in positive territory while two in red. The Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) advanced 0.8% and 0.7%, respectively, while the Communication Services Select Sector SPDR (XLC) fell 0.7%.
The fear-gauge CBOE Volatility Index (VIX) was down 5.5% to 24.29. A total of 10.26 billion shares were traded on Wednesday, lower than the last 20-session average of 12.55 billion. Advancers outnumbered decliners on the NYSE by a 1.87-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored advancing issues.
Geopolitical Conflicts Continue
On Feb 15, the Russian Ministry of Defense announced that some Russian military units started returning to barrack after completing drills near the Ukraine border. However, on Feb 16, the NATO accused Russia that there is no evidence that Russian troops are moving back.
Instead, NATO accused Russia of increasing the deployment of its forces near the Ukraine broader. The U.K. Prime Minister Boris Johnson said that the Western world have notices “some positive signs” from Russia, however, “the intelligence we’re seeing today is still not encouraging.”
Minutes of Fed’s January FOMC
U.S. stock markets steadied in the second half after the Fed released the minutes of its January FOMC. The minutes clearly indicated that the central bank will raise interest rate in March, for the first time after three years and will start reducing the size of its near $9 trillion balance sheet later the rate hike. However, the minutes refrained from giving any indication for an aggressive stance taken by the Fed to combat soaring inflation.
Moreover, Philadelphia Federal Reserve President Patrick Harker said that he would like to go for a small interest rate hike in March and then methodical moves that don’t upset the economy’s strong performance. Following these developments, U.S. stocks recovered some ground from the day’s low.
The consumer price index for January rose 7.5% year over year, triggering a large section of economists and financial researchers to predict a 50 basis point hike in the benchmark lending rate in March instead of the market’s expectation of a 25 basis-point hike.
Some investment bankers have also said that the central bank may raise interest rate seven times this year with a magnitude of 25 basis points each time. Consequently, the yield on the benchmark 10-Year U.S. Treasury Note climbed more than 2% last week and currently hovering around that level. The yield was 1.5% at the beginning of 2022.
Economic Data
The Department of Commerce reported that retail sales surged 3.8% in January, beating the consensus estimate of 2.1%. December’s data was revised downward from a decline of 1.9% to a decline of 2.5%. Year over year, retail sales jumped 13% in January buoyed by 33.4% surge in gasoline station sales and a 21.9% rise in clothing stores.
The core retail sales (excluding auto sales) increased 3.3% in January, beating the consensus estimate of 0.8%. December’s data was revised downward from a decline of 2.3% to a decline of 2.8%.
Industrial production rose 1.4% in January compared with the consensus estimate of 0.4% and a decline of 0.1% in December. Capacity utilization rose to 77.6%, beating the consensus estimate of 75.4%. December’s data was revised upward marginally from 76.5% to 76.6%.
the National Association of Home Builders/Wells Fargo Housing Market Index dipped 1 point in February to 82. Notably, any reading above 50 is considered positive.
American International Group Inc. (AIG - Free Report) reported fourth-quarter 2021 adjusted operating earnings of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.14. (Read More)
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Stock Market News for Feb 17, 2022
Wall Street closed mixed after a choppy trading session on Wednesday. Investors were assessing the developments on geopolitical crisis between Russia and Ukraine. Market participants were also digesting minutes of Fed’s January FOMC. The Dow and the Nasdaq Composite ended in red while the S&P 500 managed to finish in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% to close at 34,934.27. Notably, 13 components of the 30-stock index ended in green while 17 in red. The tech-heavy Nasdaq Composite finished at 14,124.09, sliding 0.1% due to the weak performance of large-cap stocks.
The major loser of the Nasdaq Composite was Zoom Video Communications Inc. (ZM - Free Report) , which tumbled 5.7%. Zoom Video carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, the S&P 500 rose 0.1% to end at 4,475.01. Nine out of eleven sectors of the benchmark index closed in positive territory while two in red. The Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) advanced 0.8% and 0.7%, respectively, while the Communication Services Select Sector SPDR (XLC) fell 0.7%.
The fear-gauge CBOE Volatility Index (VIX) was down 5.5% to 24.29. A total of 10.26 billion shares were traded on Wednesday, lower than the last 20-session average of 12.55 billion. Advancers outnumbered decliners on the NYSE by a 1.87-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored advancing issues.
Geopolitical Conflicts Continue
On Feb 15, the Russian Ministry of Defense announced that some Russian military units started returning to barrack after completing drills near the Ukraine border. However, on Feb 16, the NATO accused Russia that there is no evidence that Russian troops are moving back.
Instead, NATO accused Russia of increasing the deployment of its forces near the Ukraine broader. The U.K. Prime Minister Boris Johnson said that the Western world have notices “some positive signs” from Russia, however, “the intelligence we’re seeing today is still not encouraging.”
Minutes of Fed’s January FOMC
U.S. stock markets steadied in the second half after the Fed released the minutes of its January FOMC. The minutes clearly indicated that the central bank will raise interest rate in March, for the first time after three years and will start reducing the size of its near $9 trillion balance sheet later the rate hike. However, the minutes refrained from giving any indication for an aggressive stance taken by the Fed to combat soaring inflation.
Moreover, Philadelphia Federal Reserve President Patrick Harker said that he would like to go for a small interest rate hike in March and then methodical moves that don’t upset the economy’s strong performance. Following these developments, U.S. stocks recovered some ground from the day’s low.
The consumer price index for January rose 7.5% year over year, triggering a large section of economists and financial researchers to predict a 50 basis point hike in the benchmark lending rate in March instead of the market’s expectation of a 25 basis-point hike.
Some investment bankers have also said that the central bank may raise interest rate seven times this year with a magnitude of 25 basis points each time. Consequently, the yield on the benchmark 10-Year U.S. Treasury Note climbed more than 2% last week and currently hovering around that level. The yield was 1.5% at the beginning of 2022.
Economic Data
The Department of Commerce reported that retail sales surged 3.8% in January, beating the consensus estimate of 2.1%. December’s data was revised downward from a decline of 1.9% to a decline of 2.5%. Year over year, retail sales jumped 13% in January buoyed by 33.4% surge in gasoline station sales and a 21.9% rise in clothing stores.
The core retail sales (excluding auto sales) increased 3.3% in January, beating the consensus estimate of 0.8%. December’s data was revised downward from a decline of 2.3% to a decline of 2.8%.
Industrial production rose 1.4% in January compared with the consensus estimate of 0.4% and a decline of 0.1% in December. Capacity utilization rose to 77.6%, beating the consensus estimate of 75.4%. December’s data was revised upward marginally from 76.5% to 76.6%.
the National Association of Home Builders/Wells Fargo Housing Market Index dipped 1 point in February to 82. Notably, any reading above 50 is considered positive.
Stocks That Have Made Headline
Wabtec's Q4 Earnings Beat Estimates, Increase Y/Y
Wabtec Corp. (WAB - Free Report) , reported fourth-quarter 2021 earnings (excluding 16 cents from non-recurring items) of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.17. (Read More)
AIG Q4 Earnings Beat on Solid General Insurance Performance
American International Group Inc. (AIG - Free Report) reported fourth-quarter 2021 adjusted operating earnings of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.14. (Read More)