Stocks Close Lower as Investors Focus on Trade, Central Banks
March 19 2019 - 4:39PM
Dow Jones News
By Jessica Menton and David Hodari
The S&P 500 slipped Tuesday as declines in utilities shares
offset gains in consumer-discretionary stocks.
The Dow Jones Industrial Average fell 27 points, or 0.1%, to
25887, after climbing more than 100 points in early trading. The
S&P 500 dipped less than 0.1% while the technology-heavy Nasdaq
Composite rose about 0.1%.
Shares of consumer-discretionary companies in the S&P 500
rose 0.5% while utilities stocks shed 1.2%.
Boeing shares, which have come under pressure recently, rose
0.3% as U.S. federal investigators probe the development of the
Boeing 737 MAX that has been involved in two fatal crashes in the
past five months. Technology giant IBM, meanwhile, ticked up
0.4%.
Meanwhile, Revlon shares slumped 6.4% after the cosmetics
retailer found a "material weakness" in its internal controls over
its financial reporting.
Major averages retreated from session highs in afternoon trading
after The Wall Street Journal reported that top U.S. and China
negotiators are planning new rounds of talks to end a trade dispute
between the world's two biggest economies, with a target date for a
deal by the end of April.
The conflict has rattled financial markets in recent months amid
renewed concerns over slowing economic growth around the world.
Investors are also awaiting meetings of both the Federal Reserve
and the Bank of England later in the week. Market participants will
be watching the central banks' statements for signals on the health
of global growth and the potential impact of political risk events
such as U.S.-China trade negotiations and Brexit.
"Investors have had a lot of anxiety over the Fed's policy path
over the past year," said Ann Miletti, managing director and
co-lead portfolio manager at Wells Fargo Asset Management. "We
don't have certainty the trade deal with China or that domestic
growth is OK yet. We think a lot of the weakness in U.S. data is
due to seasonality, the partial government shutdown and tariffs
that were put in place, but we need more proof of that with
positive data in the second quarter."
The Fed's monetary-policy statement, expected Wednesday, is a
particular focus. Weakening data out of several major economies in
recent months have prompted jitters, with 30% of fund managers
surveyed by Bank of America Merrill Lynch citing a slowdown in
Chinese growth as the biggest risk to global markets. That overtook
the prospect of a trade war, which had been investors' biggest fear
for the previous nine months.
What market participants had seen as overly aggressive Fed
policy also sparked market worries in late 2018, prompting Fed
Chairman Jerome Powell to give increasingly dovish briefings in
2019. Mr. Powell has said the central bank will rely on data to
inform future decisions.
The bank is set to release an updated chart of its officials'
individual projections for interest rates on Wednesday at the end
of their two-day meeting. CME Group data forecast around one
interest-rate increase during 2019, although those polled predicted
a 98.7% likelihood of the Fed leaving rates unchanged at its March
meeting.
"There's a lot priced into the Fed remaining dovish," said
Shannon Saccocia, chief investment officer at wealth management
company Boston Private. "If they come out and say they expect one
rate raise this year and that they remain data dependent, that
would be a rangebound positive for markets."
The yield on the benchmark 10-year U.S. Treasury note ticked up
Tuesday to 2.609%, according to Tradeweb, from 2.605% Monday.
Yields rise as bond prices fall. The WSJ Dollar Index was down
0.1%.
In commodities, U.S. crude futures ticked down to 0.2% to $59.01
a barrel, easing from Monday's gains after OPEC and its allies
recommitted to production cuts until the end of June.
Elsewhere, the Stoxx Europe 600 rose 0.6%. In Asia, Japan's
Nikkei 225 slipped 0.1% and Hong Kong's Hang Seng gained 0.2%.
Write to Jessica Menton at Jessica.Menton@wsj.com and David
Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
March 19, 2019 16:24 ET (20:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.