By Anora Mahmudova and Sara Sjolin, MarketWatch
Housing starts dip in January; producer prices drop
NEW YORK (MarketWatch) -- U.S. stocks retreated on Wednesday, as
weaker-than-expected economic data and uncertainty about Greece's
debt negotiations weighed on sentiment.
Investors are eager to get a peek this afternoon at minutes from
the Federal Reserve's January meeting.
The S&P 500 (SPX) retreated from record levels reached on
Tuesday. Energy stocks fell as oil prices dropped ahead of a report
on stockpiles in the U.S.
The Dow Jones Industrial Average (DJI) traded lower, but stayed
above 18,000. The blue-chip index on Tuesday closed within 6 points
of its record set Dec. 26.
The Nasdaq Composite (RIXF) was flat at 4,900.
Chris Gaffney, senior market strategist at EverBank Wealth
Management, said the fact that markets react negatively to poor
economic data is a positive, as it indicates markets are less and
less dependent on the Federal Reserve's policies.
"Data today were terrible and point to fragility of the U.S.
economy, but markets know that the Fed is still likely to raise
rates this year as labor market keep improving," Gaffney said.
Gaffney said any mention of the strong dollar in the Fed minutes
would be interesting.
"We know the Fed thinks deflationary pressures due to oil plunge
are transitory. It would be interesting to see if they mention
anything about the dollar, even though there is probably not much
they can do about it," Gaffney said.
Despite Wednesday's retreat, the S&P 500 held above certain
resistance levels, challenging bearish investors. Jason Hunter,
technical analyst at J.P. Morgan, wrote that he is not looking for
a definitive move higher from the S&P 500's current range,
despite recent gains that have propelled the benchmark index to
record levels.
"While the market can advance further, our broader outlook for a
mostly range-bound first half still stands," Hunter wrote.
Data:U.S. wholesale prices posted a record 0.8% decline in
January after an unprecedented drop in energy costs, the Labor
Department said Wednesday. The drop was larger than expected.
Meanwhile, construction on new U.S. homes dropped 2% in January to
an annual rate of 1.07 million units, as heavy snowfall hindered
builders in some regions such as the Midwest and Northeast. The
numbers matched consensus forecast of economists polled by
MarketWatch.
Industrial production rose a seasonally adjusted 0.2% in
January, the Federal Reserve said Wednesday. Economists polled by
MarketWatch had expected a 0.4% rise. Another sign of weakness came
in a slight downward revision to output in the past four
months.
FOMC minutes: The minutes from the Federal Open Market
Committee's meeting on Jan. 27-28 are due at 2 p.m. Eastern. At the
meeting, Federal Reserve policy makers told investors they would be
"patient" about hiking short-term interest rates, and market
participants will scrutinize the minutes to see whether any of the
top Fed officials actually wanted to drop that phrasing.
Angie's List Inc. (ANGI) shares surged more than 50% after the
company posted quarterly profit and revenue that topped Wall
Street's expectations.
Boston Scientific Inc. (BSX) stock jumped and was the top
performer on the S&P 500. The biotech company late Tuesday said
it has settled with Johnson & Johnson Inc. (JNJ) over the
acquisition of Guidant Corp. in 2004.
Fossil Group Inc.(FOSL) dropped more than 17% after the company
late Tuesday reported adjusted fourth-quarter earnings that missed
expectations, along with revenue that disappointed.
For more on today's notable movers, read our Movers &
Shakers column.
Other markets: European stock markets moved firmly higher,
boosted by optimism that the Greek debt drama could soon come to an
end. Asian markets also got a lift from Greece and closed with
gains.
Crude-oil prices (CLH5) fell 1.2% ahead of inventories, while
metals prices were mostly lower. The dollar (DXY) rose against most
other major currencies.
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