By Anora M. Gaudiano and Barbara Kollmeyer, MarketWatch
Qualcomm tumbles after Broadcom deal nixed by Trump
Early gains on Wall Street fizzled out with the S&P 500 and
Nasdaq Composite trading in negative territory on Tuesday as tech
and energy sectors came under pressure.
Stocks earlier shook off President Donald Trump's decision to
replace Secretary of State Rex Tillerson, choosing Central
Intelligence Agency Director Mike Pompeo to take over the role.
Stocks rallied earlier after closely watched consumer-inflation
data was in line with expectations, helping to placate worries
rising prices would hasten interest-rate hikes by the Federal
Reserve.
What are the main benchmarks doing?
The S&P 500 index was down 0.4% at 2,773. Losses in the
energy, technology and financials sectors outweighed gains in the
rest of the market.
The Dow Jones Industrial Average , which earlier was up as much
as 181 points, fell 101 poitns, or 0.4%, to 25,077. General
Electric, American Express and Microsoft Corp were leading the
losses.
The Nasdaq Composite Index retreated from an intraday record
high set earlier, to trade 64 points, or 0.8%, lower at 7,524. If
the index closes lower, it will break a seven-day winning
streak.
Opinion:Here's the No. 1 tech stock, according to money flows
()
What is driving markets?
The consumer-price index rose a mild
(http://www.marketwatch.com/story/consumer-inflation-less-threatening-in-february-cpi-shows-2018-03-13)
0.2% in February after a worrisome 0.5% increase in the first month
of the year. The cost of housing rose and the price of clothes and
auto insurance posted surprisingly large gains for the second month
in a row.
Economists surveyed by MarketWatch had forecast a 0.2%
advance.
The year-over-year rate for CPI edged up to 2.2% from 2.1% in
January.
A stronger-than-expected inflation number was feared as a
potential catalyst to nudge the central bank closer to four hikes
instead of the three that the Federal Reserve is expected to carry
out, something that could weigh on stocks. The Fed is expected to
increase interest rates in March, but the jury out on how
aggressively it will act beyond that.
Analysts said Trump's decision to oust Tillerson
(http://www.marketwatch.com/story/tillerson-out-as-secretary-of-state-as-trump-taps-cia-chief-pompeo-2018-03-13)
had little lasting effect, coming amid a number of personnel moves
by the administration.
(http://www.marketwatch.com/story/what-to-watch-in-the-cpi-report-2018-03-12)And:
The overheating economy could crash in 2019, this top forecaster
says
(http://www.marketwatch.com/story/the-overheating-economy-could-crash-in-2019-this-top-forecaster-says-2018-03-10)
What are strategists saying?
"Investors got used to the game of musical chairs in the White
House and realize that it's not a true economic risk," said Karyn
Cavanaugh, senior market strategist at Voya Financial, referring to
the Tillerson exit.
"CPI really was on the money, showing inflation is not too hot
and not too cold. Combined with the fact that there is still slack
in the labor market we don't worry too much about inflation,"
Cavanaugh said.
Which stocks are active?
Shares of Qualcomm Inc.(QCOM) fell 4.6% after Trump on Monday
blocked Broadcom Ltd's (AVGO) $117 billion hostile bid for the
semiconductor group, citing national security concerns
(http://www.marketwatch.com/story/trump-blocks-broadcom-bid-to-buy-qualcomm-citing-national-security-2018-03-12).
Read:How Broadcom vs. Qualcomm went from hostile takeover bid to
a Trump blockage
(http://www.marketwatch.com/story/how-broadcom-vs-qualcomm-went-from-hostile-takeover-bid-to-a-trump-blockade-2018-03-12)
Plus:Semiconductor stocks are hitting new highs again, yet
they're still cheap
(http://www.marketwatch.com/story/semiconductor-stocks-are-hitting-new-highs-again-yet-theyre-still-cheap-2018-03-08)
(http://www.marketwatch.com/story/semiconductor-stocks-are-hitting-new-highs-again-yet-theyre-still-cheap-2018-03-08)DSW
Inc.(DSW) shares rallied 11% after the footwear retailer posted
quarterly results.
Stitch Fix Inc.(SFIX) shares fell 1.6% after the online clothing
retailer beat Wall Street's forecasts for sales, but missed on
revenue. In addition, nearly 38 million new shares of the company
became eligible for trading after Monday's close.
(http://www.marketwatch.com/story/a-lot-more-stitch-fix-stock-could-be-coming-after-earnings-2018-03-12)
Shares of Dick's Sporting Goods Inc. (DKS) sank 4.9% after the
sporting goods retailer beat fiscal fourth-quarter profit
expectations, but missed on sales and provided a downbeat outlook
(http://www.marketwatch.com/story/dicks-sporting-goods-stock-sinks-after-sales-miss-downbeat-outlook-offsets-profit-beat-2018-03-13).
Micron Technology Inc.(MU) is up 1.6% after Mizuho raised its
price target to $66, the third firm to raise its target this
week.
Shares of retailers were sharply higher as they attend Bank of
America Merrill Lynch Consumer & Retail Technology
Conference.
Macy's Inc. (M) shares jumped 4.3%, while Kohl's Corp.(KSS)
rallies 3.7%.
What are other markets doing?
European stocks were mixed
(http://www.marketwatch.com/story/european-stocks-edge-higher-in-countdown-to-us-inflation-data-2018-03-13),
while Asian markets had also a mixed day
(http://www.marketwatch.com/story/asian-markets-pause-ahead-of-us-inflation-report-2018-03-12)
(http://www.marketwatch.com/story/nikkei-gets-off-to-quick-start-as-asian-markets-build-on-last-weeks-rebound-2018-03-11).
The ICE U.S. Dollar Index edged lower after the inflation
report, while gold prices
(http://www.marketwatch.com/story/gold-slips-as-dollar-firms-ahead-of-cpi-report-that-could-shift-fed-rate-hike-pace-2018-03-13)
tipped slightly higher, and oil prices were slumping.
The yield on the 10-year U.S. Treasury retreated to 2.845% from
2.867% before the report.
(END) Dow Jones Newswires
March 13, 2018 12:27 ET (16:27 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.