By Anora Mahmudova and Victor Reklaitis, MarketWatch
Monthly car sales slow to 10-month low in February
NEW YORK (MarketWatch)--U.S. stocks declined on Tuesday,
retreating from all-time highs and the psychologically significant
5,000 level for the Nasdaq reached on Monday.
Weaker-than-expected growth in monthly car sales dampened
spirits, sending shares of Ford and Fiat Chrysler sharply down.
Bone-chilling weather in February was cited as a culprit for weak
demand.
On a day in which few major economic gauges were in the
spotlight, investors turned their attention to Israeli Prime
Minister Benjamin Netanyahu, who used a speech to. Congress
(http://blogs.marketwatch.com/capitolreport/2015/03/03/live-blog-and-video-of-benjamin-netanyahus-speech-to-congress/)
to criticize the White House's attempts to reach a nuclear deal
with Iran, saying it was a "bad deal." The speech reminded
investors of potential geopolitical risks abroad, with stocks
extending losses but then coming off their lows.
The S&P 500 (SPX) lost 9.61 points, or 0.5%, to close at
2,107.78, with eight of its main 10 sectors closing lower. A jump
in oil prices lifted energy stocks, putting a lid on losses in the
index.
The Dow Jones Industrial Average (DJI), which dropped as much as
146 points, closed 85.26 points, or 0.5%, lower at 18,203.37.
Twenty-four of the 30 blue-chip companies that make up the Dow
ended with losses.
After a historic Monday finish, the tech-heavy Nasdaq Composite
(RIXF) pulled back from the 5,000 level, settling down 28.2 points,
or 0.6%, at 4,979.90. On Monday, the Nasdaq scored its first close
above 5,000 since the Internet bust, finishing at 5,008.10 and just
0.8% short of the record close of 5,048.62 set March 10, 2000.
Although the CBOE volatility index, which measures implied
volatility on the S&P 500, closed only slightly higher, an 11%
jump earlier in the day Tuesday suggested that investors had been
bracing for the worst.
J.J. Kinahan, chief strategist at TD Ameritrade, said the jump
by the VIX indicates investors are hedging their bets ahead of this
week's major event: the February jobs report on Friday.
"Investors are reassessing risks and buying protection ahead of
the jobs report. After disappointing car-sales numbers, there are
some concerns that the jobs report may not be as stellar as hoped
for," Kinahan said.
"It is also normal for markets to pull back after reaching
record highs, with people booking some profits and selling ahead of
Friday employment numbers," he said.
Commenting on Nasdaq's 5,000 level, Kelli Keough, senior vice
president of trading services at Charles Schwab, noted that those
high levels are greeted with a healthy sense of caution rather than
euphoria.
"Investors are not celebrating the way they were celebrating in
2000. The near record levels this time are also not associated with
super high price-to-earnings ratios. Current Nasdaq PEs are much
more reasonable and companies are actually making money, unlike in
the heydays of 2000," Keough said.
Check out: 7 charts showing how the Nasdaq's changed since the
tech crash 15 years ago
(http://www.marketwatch.com/story/7-ways-the-nasdaqs-changed-since-the-tech-crash-2015-02-27)
Notable individual movers: Mylan NV(MYL) and Ford Motor Co. (F)
were among the S&P's biggest decliners, falling 2.4% and 3.3%
respectively. Mylan late Monday delivered a quarterly report that
roughly matched Wall Street's forecasts, while Ford reported that
its February U.S. vehicle sales fell 1.9% from a year ago
(http://www.marketwatch.com/story/ford-motors-stock-falls-after-february-us-sales-decline-2015-03-03).
Shares of McDermott International Inc.(MDR) soared 28% to $3.33
after the oilfield-engineering company late Monday posted a
surprise profit for the fourth quarter
(http://www.marketwatch.com/story/mcdermott-shares-jump-on-surprise-earnings-2015-03-02).
Read more about Tuesday's jumpiest stocks in Movers &
Shakers
(http://www.marketwatch.com/story/best-buy-autozone-kate-spade-earnings-in-focus-2015-03-02)
U.S. sales of cars and light trucks slowed to a 10-month low in
February
(http://www.marketwatch.com/story/us-car-and-light-truck-sales-slowed-to-10-month-low-in-february-2015-03-03),
according to the latest tabulation of results from Autodata. Sales
figures came in lower than expected, at an annual rate of 16.23
million.
"Car sales were disappointing because of a bumper month in
January. Investors are beginning to worry that consumers are not
spending on big item tickets," Kinahan said.
Other markets:European stock markets slipped
(http://www.marketwatch.com/storyno-meta-for-guid), while Asian
stocks closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), with China's
Shanghai Composite Index sliding 2.2%.
Oil futures
(http://www.marketwatch.com/story/oil-ticks-higher-but-stays-volatile-2015-03-03)(CLJ5)
climbed by nearly 2% on Tuesday to settle back above $50 a barrel,
with violence in Libya and concerns surrounding Iran's nuclear
program feeding worries about global oil supplies. Gold futures
settled lower (http://www.marketwatch.com/storyno-meta-for-guid)
for a second straight session at $1,204.40. The dollar (DXY) dipped
against major rivals.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires