Health care and energy sectors were the main laggards
US stocks closed lower for a third session in a row on Wednesday, 06 March 2019 on tepid U.S. data as the Federal Reserve's Beige Book, an anecdotal account of business conditions, showed the partial government shutdown had weighed on economic activity.
The Dow Jones Industrial Average fell 133.17 points, or 0.5%, to 25,673.46, while the S&P 500 index dropped 18.20 points, or 0.7%, to 2,771.45. The Nasdaq Composite Index declined 70.44 points, or 0.9%, to 7,505.92.
Health care and energy sectors were Wednesday's laggards, weighed down by some industry-specific overhangs. Conversely, the materials, utilities, and communication services sectors outperformed.
Investors took little solace from a new round of stimulus measures announced by Beijing Tuesday in an effort to shore up the world's second-largest economy, which is seen suffering a cyclical slowdown exacerbated by the U.S.-China trade conflict. Market participants are awaiting fresh catalysts to drive trade after largely factoring in upbeat prospects for U.S.-China trade talks to avert a further ramp up in tariffs.
The dollar, as measured by the ICE U.S. Dollar was nearly flat at 96.871.
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Reviewing Wednesday's economic data, which included the Trade Balance Report for December, ADP Employment Change for February, the Fed's Beige Book for March, and the weekly MBA Mortgage Applications Index. For December, the trade deficit widened to $59.8 billion (consensus -$57.8 billion) from a downwardly revised $50.3 billion (from -$49.3 billion) in November. The December deficit is the widest since October 2008 when the world was in the throes of the worst financial crisis since the Great Depression.
The Federal Reserve's Beige Book for March noted that ten Fed Districts reported slight-to-moderate growth while Philadelphia and St. Louis reported flat economic conditions. Consumer spending activity was described as mixed. Lower retail and auto sales were attributed to harsh winter weather and a higher cost of credit. Overall manufacturing activity increased while activity in the nonfinancial services sector increased at a modest-to-moderate pace. The weekly MBA Mortgage Applications Index decreased 2.5% following a 5.3.
Bullion prices ended in a mixed mode on Wednesday, 6 March 2019 at Comex. Gold futures settled higher on Wednesday, halting what had been a string of seven straight lossesthe longest such string of declines in two years. Silver slipped.
Bullion prices ended in a mixed mode on Wednesday, 6 March 2019 at Comex. Gold futures settled higher on Wednesday, halting what had been a string of seven straight lossesthe longest such string of declines in two years. Silver slipped.
April gold rose $2.90, or 0.2%, to settle at $1,287.60 an ounce, rebounding from a 0.2% loss a day earlier. May silver lost 0.1% to $15.085 an ounce after ending flat a day earlier. Weakness in the U.S. stock market, meanwhile, provided cover for the mild rebound in gold, though a steady dollar, which traded higher week to date, worked to offset gold-supportive factors.
Gold's decline last week of 2.5% marked the sharpest weekly fall since August. Broad risk-on sentiment, which boosted U.S. and global stocks, as well as strength in the U.S. dollar, worked to dull demand for the haven precious metal then and again to start this week.
Crude oil prices ended lower at Nymex on Wednesday, 06 March 2019. U.S. benchmark oil prices, however, declined following a hefty weekly rise in domestic crude inventory. A drop in U.S. gasoline stockpiles that was more than double market expectations lifted futures prices for the fuel to their highest in over four months on Wednesday. The drop in gasoline supplies helped to offset pressure on crude-oil priceskeeping them off their lows of the session.
West Texas Intermediate crude for April delivery gave up 34 cents, or 0.6%, to settle at $56.22 a barrel on the New York Mercantile Exchange. It was trading at $55.62 before the supply data. May Brent however, tacked on 13 cents, or 0.2%, to $65.99 a barrel on ICE Futures Europe.
The Energy Information Administration on Wednesday reported that U.S. crude supplies rose by 7.1 million barrels for the week ended March 1. That was well above the average climb of 1.9 million barrels expected by market. Supplies of gasoline fell by 4.2 million barrels, while distillates edged down by 2.4 million barrels last week. Market had shown expectations for supply declines of 2 million barrels for gasoline and 1.4 million barrels for distillates.
U.S. Treasuries saw increased buying interest, sending yields lower across the curve. The 2-yr yield declined four basis points to 2.51%, and the 10-yr yield declined three basis points to 2.69%.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, revised fourth quarter unit labor costs and nonfarm productivity, and the Consumer Credit report for January on Thursday.
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