Wall Street extends the weekly decline
US stocks ended in the red on Wednesday, 14 March 2018 at Wall Street. The S&P 500 and Dow industrials finished down for a third session on Wednesday as fears of a potential trade war resurfaced after President Donald Trump announced that his administration will seek to trim the U.S.'s trade deficit with China by $100 billion via tariffs.
The Dow Jones Industrial Average fell 248.91 points, or 1%, to 24,758.12. The S&P 500 index slid 15.83 points, 0.6%, to 2,749.48. The Nasdaq Composite Index shed 14.20 points, or 0.2%, to 7,496.81.
Both the materials and industrial sectors were among the biggest losers, as they are seen to have the most exposure to trade issues.
Among Dow components, Boeing was a notable Dow decliner, falling 2.6%. A report by the New York Times suggested that Boeing is a prime target for China to retaliate against in the event of a full-blown trade war.
Investors had a sizable batch of economic data to digest on Wednesday, including the February readings for the Producer Price Index and Retail Sales. Retail Sales disappointed, declining for a third straight month (-0.1% actual vs +0.3% consensus), but the January decrease was reduced to 0.1% from 0.3%. The Producer Price Index, meanwhile, rose 0.2% in February, more than the consensus of 0.1%, and the core Producer Price Index also jumped 0.2%, as expected. Those monthly changes leave the PPI up 2.8% year over year (up from 2.7% in January) and the core CPI up 2.5% year over year (up from 2.2% in January).
ALso, U.S. retail sales fell 0.1% in February, the third straight monthly decline. However, sales grew 0.3% if autos and gas are stripped out. The data helped soothe concerns that inflation was picking up, which could have led to an environment where the Federal Reserve has to become more aggressive in raising interest rates, something investors have cited as a primary concern for stocks.
Bullion prices ended lower at Comex on Wednesday, 14 March 2018. Gold futures end lower on Wednesday, giving up a small portion of what they gained a day earlier, as the market marked a decade since prices first topped $1,000 an ounce. Some strength in the dollar pressured prices Wednesday, even as data showed that wholesale inflation prices rose by a mild 0.2% in February, and retail sales fell in February for a third month in a row.
April gold lost $1.50, or 0.1%, to settle at $1,325.60 an ounce. The contract rose $6.30, or 0.5% on Tuesday, for its biggest single-session dollar and percentage rise since 6 March 2017. Gold rose then as the U.S. dollar softened and the high-profile departure of Secretary of State Rex Tillerson boosted haven demand for the yellow metal. The contract has been volatile, trading within a relatively tight range. May silver fell 0.5% to $16.537 an ounce.
Crude oil prices settled higher on Wednesday, 14 March 2018 at Nymex. Oil prices notched a modest gain on Wednesday, as gasoline futures climbed on the back of a hefty decline in U.S. supplies of the motor fuel, offsetting earlier pressure from a bigger-than-expected rise in crude supplies.
April West Texas Intermediate crude rose 25 cents, or 0.4%, to settle at $60.96 a barrel on the New York Mercantile Exchange. The contract tried for gains in the previous session, pushing briefly above $62, but gave up that run in the wake of perceived risks to the Iran nuclear deal after U.S. President Donald Trump's ouster of Secretary of State Rex Tillerson.
The U.S. Energy Information Administration said Wednesday that crude supplies rose by 5 million barrels for the week ended March 9. That was double the rise expected by market. The American Petroleum Institute on Tuesday reported a rise of nearly 1.2 million barrels. Gasoline stockpiles, however, dropped 6.3 million barrels for the week, while distillate stockpiles lost 4.4 million barrels, according to the EIA.
On Wednesday, the ICE U.S. Dollar Index traded less than 0.1% higher at 89.70, but the index was down roughly 1% so far this month.
Investors also received the Business Inventories report for January, which increased 0.6% as expected, but it didn't have much impact on trading.
U.S. Treasuries recorded their third consecutive advance on Wednesday, settling near session highs. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, declined four basis points to 2.82%, while the 2-yr yield slipped just one basis point to 2.25%, resulting in a flattening of the yield curve. P> Looking ahead, investors will receive a big batch of economic data on Thursday, including export and import prices for February, the weekly Initial Claims report (consensus 226K), the Empire State Manufacturing Survey for March (consensus 15.0), the Philadelphia Fed Index for March (consensus 23.7), and the NAHB Housing Market Index for March (consensus 72). All but the NAHB Housing Market Index will be released at 8:30 AM ET; the NAHB Index will be released at 10:00 AM ET.
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