By Anora Mahmudova and Victor Reklaitis, MarketWatch
Monthly car sales slowed 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 U.S. 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, deepening losses
immediately after the speech, but indexes have since come off their
lows.
The S&P 500 (SPX) was lower, with eight of its main 10
sectors trading lower. A jump in oil prices lifted energy stocks,
putting a lid on losses in the index. The Dow Jones Industrial
Average (DJI) dropped as much as 146 points, but recovered, at
least partially, by the end of the session. More than 80% of the 30
blue-chip companies were showing losses.
After a record-setting Monday, the tech-heavy Nasdaq Composite
(RIXF) pulled back from the 5,000 level. On Monday, the Nasdaq
scored its first close above 5,000 since the Internet bust, closed
at 5,008.10 on Monday, only 0.8% short of its record close of
5,048.62 hit March 10, 2000.
Although relatively quiescent, an 8% jump in volatility to
nearly 14 on Tuesday implies that investors are bracing for the
worst, with the closely watched jobs report slated for Friday.
JJ Kinahan, chief strategist at TD Ameritrade, said today's high
implied volatility number is indicative of investors hedging
against this week's major event -- the jobs report.
"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 in some profits and selling ahead
of Friday employment numbers," he added.
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. 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 25% 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)
Tuesday's economic news: No top-tier data releases are on tap
Tuesday, but investors are taking in monthly auto-sales
figures.
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, 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.
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