US close: Stocks end mostly lower as oil slides and investors eye Fed
US stocks ended mostly lower on Tuesday as oil prices slid and investors digested mixed economic data a day before the Federal Reserve’s rate announcement.
The Dow Jones Industrial Average ended up 0.1%, but the S&P 500 closed down 0.2% and the Nasdaq slipped 0.5%.
Oil prices declined as the Organization of the Petroleum Exporting Countries said global demand in 2016 for its crude would be lower than previously thought while supply would likely be higher than expected this year.
West Texas Intermediate dropped 2% to $36.41 per barrel and Brent crude fell 1.9% to $38.77 per barrel.
Data releases were mixed.
Retail sales dropped – albeit less than expected – in February, while January's data was revised down into negative territory, according to the Commerce Department. Sales fell 0.1% month-on-month to $447.3bn in February, the first drop since September. The decline was not as bad as the 0.2% consensus forecast, however. On an annual basis, sales were up 2.9%.
But January's sales data was revised markedly down to a 0.4% fall, having initially been published as a 0.2% rise.
On a cheerier note, however, a survey from the New York Fed showed business conditions in the region improved more than expected in March.
The Empire State manufacturing index rose to a reading of 0.6 from -16.6 in February, marking the first positive reading since July last year and beating expectations of -10.
Elsewhere, a report from the National Association of Home Builders showed home-builder sentiment held steady in March.
An index of builder confidence in the market for new single-family homes remained at the seasonally adjusted level of 58 in March, missing forecasts of 59.
Meanwhile, the ratio of business inventories to sales was 1.40 in January, marginally higher than 1.39 in December and 1.36 it was 12 months ago, the Commerce Department said, signalling that companies are failing to sell what they have produced.
The Fed is due to announce its policy decision on Wednesday and is widely expected to keep measures unchanged.
Capital Economics said that “despite the improving economic data and the recovery in financial markets, the Fed is very unlikely to hike interest rates from between 0.25-0.50%”.
“Nevertheless, with the market turmoil subsiding and domestic price pressures mounting, we expect the Fed to resume raising rates in June (or possibly even April), with the fed funds target range climbing to between 1.00% and 1.25% by year-end.”
Earlier on Tuesday, the Bank of Japan stood pat on interest rates despite deteriorating conditions in the world’s third largest economy. The central bank also downgraded its view of the economy and inflation expectations.
On the corporate front, shares in Valeant Pharmaceuticals halved after the company’s fourth quarter results missed analysts’ expectations and it downgraded its revenue forecast for 2016.
Avon Products tumbled after it announced on Monday that it would cut around 2,500 jobs and move its corporate headquarters to the UK.
On the upside, Apple rose after Morgan Stanley said demand for the iPhone in the first quarter of this year is ahead of analysts’ expectations.
In currencies, the dollar was 1% firmer versus the pound, 0.1% lower against the euro and 0.6% weaker versus the yen.
S&P 500 - Risers
Mead Johnson Nutrition Co. (MJN) $83.81 +11.09%
Range Resources Corp. (RRC) $31.84 +3.85%
EQT Corp. (EQT) $62.61 +3.15%
Stericycle Inc. (SRCL) $118.46 +2.16%
Cabot Oil & Gas Corp. (COG) $22.57 +2.13%
Apple Inc. (AAPL) $104.58 +2.01%
Marathon Oil Corp. (MRO) $11.31 +1.98%
Whirlpool Corp. (WHR) $168.84 +1.69%
Northrop Grumman Corp. (NOC) $191.66 +1.64%
Assurant Inc. (AIZ) $78.67 +1.60%
S&P 500 - Fallers
Endo International Plc (ENDP) $32.57 -22.60%
Peabody Energy Corp. (BTU) $4.01 -10.60%
Tenet Healthcare Corp. (THC) $25.36 -7.09%
Freeport-McMoRan Inc (FCX) $9.27 -7.02%
Genworth Financial Inc. (GNW) $2.72 -6.85%
Leucadia National Corp. (LUK) $14.50 -5.76%
Fossil Group Inc (FOSL) $46.85 -5.49%
Alcoa Inc. (AA) $9.15 -5.38%
CF Industries Holdings Inc. (CF) $33.63 -5.37%
Western Digital Corp. (WDC) $45.61 -5.35%
Dow Jones I.A - Risers
Apple Inc. (AAPL) $104.58 +2.01%
Wal-Mart Stores Inc. (WMT) $68.08 +1.07%
Nike Inc. (NKE) $61.42 +1.00%
Travelers Company Inc. (TRV) $113.92 +0.98%
Microsoft Corp. (MSFT) $53.59 +0.79%
Intel Corp. (INTC) $31.65 +0.70%
Home Depot Inc. (HD) $129.72 +0.68%
Visa Inc. (V) $71.90 +0.57%
Exxon Mobil Corp. (XOM) $82.83 +0.51%
McDonald's Corp. (MCD) $123.42 +0.42%
Dow Jones I.A - Fallers
Pfizer Inc. (PFE) $29.52 -1.93%
Merck & Co. Inc. (MRK) $52.42 -1.24%
Goldman Sachs Group Inc. (GS) $152.04 -0.94%
E.I. du Pont de Nemours and Co. (DD) $62.82 -0.76%
United Technologies Corp. (UTX) $96.24 -0.61%
Walt Disney Co. (DIS) $98.24 -0.58%
American Express Co. (AXP) $59.23 -0.57%
Caterpillar Inc. (CAT) $72.40 -0.45%
Unitedhealth Group Inc. (UNH) $124.86 -0.29%
Cisco Systems Inc. (CSCO) $27.66 -0.14%
Nasdaq 100 - Risers
Stericycle Inc. (SRCL) $118.46 +2.16%
Apple Inc. (AAPL) $104.58 +2.01%
Tesla Motors Inc (TSLA) $218.34 +1.48%
Electronic Arts Inc. (EA) $65.72 +1.44%
Skyworks Solutions Inc. (SWKS) $73.61 +1.13%
Costco Wholesale Corp. (COST) $154.18 +0.99%
Analog Devices Inc. (ADI) $56.11 +0.79%
Microsoft Corp. (MSFT) $53.59 +0.79%
Sba Communications Corp. (SBAC) $95.07 +0.74%
Starbucks Corp. (SBUX) $59.08 +0.73%
Nasdaq 100 - Fallers
Endo International Plc (ENDP) $32.57 -22.60%
Western Digital Corp. (WDC) $45.61 -5.35%
Incyte Corp. (INCY) $65.64 -4.84%
Mylan Inc. (MYL) $45.92 -4.07%
Vimpelcom Ltd Ads (VIP) $3.83 -3.77%
Vertex Pharmaceuticals Inc. (VRTX) $82.83 -3.22%
Illumina Inc. (ILMN) $149.98 -3.09%
Biomarin Pharmaceutical Inc. (BMRN) $83.42 -2.98%
NetApp Inc. (NTAP) $25.83 -2.93%
Biogen Inc (BIIB) $250.33 -2.89%