Wall Street closed mixed on Thursday as investors’ remained anxious about the delay in sealing a U.S. – China trade deal. Moreover, weak earnings data from the United States and China also dented investors’ confidence. However, stock price movements in either direction were largely marginal. The Dow managed to end in the green while both S&P 500 and Nasdaq Composite finished in the red.
The Dow Jones Industrial Average (DJI) closed at 25,709.94, gaining 7.05 points. However, the S&P 500 Index (INX) decreased 0.1% to close at 2,808.48. The Nasdaq Composite Index (IXIC) closed at 7,630.91, shedding 0.2%. A total of 6.69 billion shares were traded on Thursday, lower than the last 20-session average of 7.37 billion shares. Decliners outnumbered advancers on the NYSE by 1.24-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.33-to-1 ratio. The CBOE VIX increased 0.7% to close at 13.50.
How Did the Benchmarks Perform?
The Dow ended in positive territory for the second consecutive day. Notably, 20 stocks of the 30-stocks blue-chip index finished in the green while ten ended in the red. The S&P 500 also closed in the red after three straight days of gain. The Materials Select Sector SPDR (XLC) and Communication Services Select Sector SPDR (XLB) lost 0.7% and 0.4%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the red while four finished in the green.
The tech-heavy Nasdaq finished in the red reversing three days of winning streak owing to weak performance of large-cap stocks. Shares of Facebook Inc. (FB - Free Report) declined 1.9% following global outage of Instagram and WhatsApp and other major apps of the company. Facebook carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Weak Economic Data
On Mar 14, the Department of Commerce reported that U.S. new home sales declined 6.9% in January. New homes sold at a seasonally adjusted annual rate of 607,000 in January, missing he consensus estimate of 619,000.
Economists largely blamed the 35-day long partial government shutdown and stock market reverses in the fourth quarter of 2018 for such weak numbers. However, new home sales in December revised upward from 621,000 to 652,000. Similarly, new home sales in November were also revised upward from 599,000 to 628,000.
The Department of Labor reported that U.S. initial jobless claims for the week ended Mar 9 increased by 6,000 to 229,000, higher than the consensus estimate of 224,000. The number of people already collecting unemployment benefits, known as continuing claims, increased by 18,000 to 1.77 million.
Meanwhile, China’s value-added industrial output grew 5.3% year over year in the January-February period. This marked the slowest growth rate for the first two months of any year in seventeen years.
Delay in Trade Deal
Investors are concerned that closure of a new trade deal between the United States and China is unlikely to happen this month. China wants a trade deal to be announced in the upcoming summit between President Trump and Chinese leader Xi Jinping slated to take place late this month. However, U.S. officials are still not satisfied with all pending trade-related issues which are part of bilateral negotiations. In that case, the meeting between the two Presidents may be delayed.
Delay in Brexit
On Mar 14, British lawmakers voted in favor of a delay to the Mar 29 deadline when Brittan is scheduled to quit the European Union. On Mar 13, the UK parliament voted against a no-deal Brexit. On Mar 12, British lawmakers rejected the proposed Brexit deal submitted by British Prime Minister Theresa May.
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