By Sue Chang and Anora M. Gaudiano, MarketWatch
Nasdaq snaps 7-session winning streak
The stock market closed lower Tuesday as the technology and
financial sectors came under pressure even as investors mostly
shrugged off President Donald Trump's decision to replace Secretary
of State Rex Tillerson.
Stocks had rallied earlier after closely watched
consumer-inflation data was in line with expectations, helping to
placate worries that rising prices would hasten interest-rate hikes
by the Federal Reserve.
How did the main benchmarks fare?
The S&P 500 index dropped 17.71 points, or 0.6%, to
2,765.31. Technology and financials were big losers, posting losses
of at least 1%.
The Dow Jones Industrial Average , which earlier was up nearly
200 points, fell 171.58 points, or 0.7%, to 25,007.03. General
Electric Co. (GE) , American Express Co. (AXP) and Microsoft
Corp.(MSFT) led the losses.
The Nasdaq Composite Index ended a seven-session winning streak
to slide 77.31 points, or 1%, to 7,511.01.
Opinion:Here's the No. 1 tech stock, according to money flows
()
What drove the 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 is 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. Trump has nominated Central Intelligence
Agency Director Mike Pompeo to replace Tillerson.
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 were 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.
"Though market sentiment may be periodically impacted by
geopolitical uncertainty, including announcements such as the
secretary of state change, we will continue to focus on market
fundamentals that can drive long-term performance in the economy,"
said John Lynch, chief investment strategist for LPL Financial, in
a note.
Which stocks were active?
Shares of Qualcomm Inc.(QCOM) fell 5% after Trump on Monday
blocked Broadcom Ltd's (AVGO) $117 billion hostile bid for the
semiconductor company, citing national security concerns
(http://www.marketwatch.com/story/trump-blocks-broadcom-bid-to-buy-qualcomm-citing-national-security-2018-03-12).
(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 3.6% 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) reversed earlier
losses to rise 1% 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) edged up 0.1% 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 the Bank
of America Merrill Lynch Consumer & Retail Technology
Conference. Macy's Inc. (M) gained 3.7%, while Kohl's Corp.(KSS)
rallied 2.7%.
How did other markets perform?
European stocks were mostly lower
(http://www.marketwatch.com/story/european-stocks-edge-higher-in-countdown-to-us-inflation-data-2018-03-13),
while Asian markets had 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 fell 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)
settled higher and oil prices slumped.
The yield on the 10-year U.S. Treasury retreated to 2.84% from
2.86% before the report.
--Barbara Kollmeyer contributed to this report
(END) Dow Jones Newswires
March 13, 2018 16:25 ET (20:25 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.