Wall Street closed mixed on Wednesday after an extremely choppy session. Market participants remained highly concerned that higher interest rate regime globally has started taking toll on financial systems, especially on banking sector. This headwind was partially offset by favorable economic data. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite managed to finish in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 0.9% or 280.83 points to close at 31,874.57. At intraday low, the blue-chip index was down 725 points. Notably, 20 components of the 30-stock index ended in negative territory and 10 in positive zone.
The tech-heavy Nasdaq Composite finished at 11,434.05, rising 5.9 points due to strong performance of large-cap technology stocks. The S&P 500 fell 0.7% to end at 3,891.293. Six out of 11 broad sectors of the benchmark index closed in negative territory while five in positive zone.
The Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI) the Financials Select Sector SPDR (XLF) and the Materials select Sector SPDR (XLB) tumbled 5.4%, 2.4%, 2.7% and 3.2%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) gained 1.4%.
The fear-gauge CBOE Volatility Index (VIX) was up 10.2% to 26.14. A total of 13.11 billion shares were traded on Wednesday, higher than the last 20-session average of 11.75 billion. Decliners outnumbered decliners on the NYSE by a 3.34-to-1 ratio. On Nasdaq, a 2.33-to-1 ratio favored declining issues.
Concerns Regarding Global Banking Sector
Last week, U.S. stock markets tumbled following the collapse of two major regional banks, namely, the Silicon Velley Bank and the Signature Bank. While the Silicon Velley Bank was a key lender to technology startups, the Signature Bank was primarily crypto-centric. The government has reused the depositors of those two banks.
On Mar 15, the global financial markets were rattled by Credit Suisse Group AG . Earlier this week, the bank reported that it had found “certain material weaknesses in our internal control over financial reporting for the years 2021 and 2022.” The bank also stated that depositors have withdrawn more than $120 billion in fourth-quarter 2022.
As a result, the bank needs immediate financing. However, the Swiss lenders largest investor, the Saudi National Bank declined to invest more as the bank is already holding 10% of Credit Swiss, the maximum limit its regulator can permit. Consequently, the shares of Credit Swiss plunged.
However, the situation stabilized to some extend yesterday evening after the Swiss Financial Market Supervisory Authority and the Swiss National Bank said in a statement that Credit Swiss “meets the capital and liquidity requirements imposed on systemically important banks.” The Swiss central bank also decided to step in if situation needs.
Credit Swiss current carries a Zacks Rak #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of labor reported that producer price index (PPI) dropped unexpected by 1% month-over-month in February compared with the consensus estimate of a gain of 0.3%. January’s data was revised downward from 0.7% to 0.3%. Year over year, PPI climbed 4.6% in February, well below January’s increase of 5.7%.
Core PPI (excluding volatile food and energy items) rose 0.3% month-over-month in February. The consensus estimate was 0.4%. Core PPI increased 0.6% in January. Year over year, core PPI surged 4.4% in February in line with the previous month.
The Department of Commerce reported that retail sales fell 0.4% in February compared with the consensus estimate of a decline of 0.1%. January’s data was revised upward to a gain of 3.2% from 3% reported earlier.
Core retail sales (excluding auto) fell 0.1% in February compared with the consensus estimate of a break-even. January’s data was revised upward form a gain of 2.3% reported earlier to 2.4%.
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Stock Market News for Mar 16, 2023
Wall Street closed mixed on Wednesday after an extremely choppy session. Market participants remained highly concerned that higher interest rate regime globally has started taking toll on financial systems, especially on banking sector. This headwind was partially offset by favorable economic data. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite managed to finish in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 0.9% or 280.83 points to close at 31,874.57. At intraday low, the blue-chip index was down 725 points. Notably, 20 components of the 30-stock index ended in negative territory and 10 in positive zone.
The tech-heavy Nasdaq Composite finished at 11,434.05, rising 5.9 points due to strong performance of large-cap technology stocks. The S&P 500 fell 0.7% to end at 3,891.293. Six out of 11 broad sectors of the benchmark index closed in negative territory while five in positive zone.
The Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI) the Financials Select Sector SPDR (XLF) and the Materials select Sector SPDR (XLB) tumbled 5.4%, 2.4%, 2.7% and 3.2%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) gained 1.4%.
The fear-gauge CBOE Volatility Index (VIX) was up 10.2% to 26.14. A total of 13.11 billion shares were traded on Wednesday, higher than the last 20-session average of 11.75 billion. Decliners outnumbered decliners on the NYSE by a 3.34-to-1 ratio. On Nasdaq, a 2.33-to-1 ratio favored declining issues.
Concerns Regarding Global Banking Sector
Last week, U.S. stock markets tumbled following the collapse of two major regional banks, namely, the Silicon Velley Bank and the Signature Bank. While the Silicon Velley Bank was a key lender to technology startups, the Signature Bank was primarily crypto-centric. The government has reused the depositors of those two banks.
On Mar 15, the global financial markets were rattled by Credit Suisse Group AG . Earlier this week, the bank reported that it had found “certain material weaknesses in our internal control over financial reporting for the years 2021 and 2022.” The bank also stated that depositors have withdrawn more than $120 billion in fourth-quarter 2022.
As a result, the bank needs immediate financing. However, the Swiss lenders largest investor, the Saudi National Bank declined to invest more as the bank is already holding 10% of Credit Swiss, the maximum limit its regulator can permit. Consequently, the shares of Credit Swiss plunged.
However, the situation stabilized to some extend yesterday evening after the Swiss Financial Market Supervisory Authority and the Swiss National Bank said in a statement that Credit Swiss “meets the capital and liquidity requirements imposed on systemically important banks.” The Swiss central bank also decided to step in if situation needs.
Credit Swiss current carries a Zacks Rak #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of labor reported that producer price index (PPI) dropped unexpected by 1% month-over-month in February compared with the consensus estimate of a gain of 0.3%. January’s data was revised downward from 0.7% to 0.3%. Year over year, PPI climbed 4.6% in February, well below January’s increase of 5.7%.
Core PPI (excluding volatile food and energy items) rose 0.3% month-over-month in February. The consensus estimate was 0.4%. Core PPI increased 0.6% in January. Year over year, core PPI surged 4.4% in February in line with the previous month.
The Department of Commerce reported that retail sales fell 0.4% in February compared with the consensus estimate of a decline of 0.1%. January’s data was revised upward to a gain of 3.2% from 3% reported earlier.
Core retail sales (excluding auto) fell 0.1% in February compared with the consensus estimate of a break-even. January’s data was revised upward form a gain of 2.3% reported earlier to 2.4%.