Friday, 20 March 2015 02:23
NEW YORK: US stocks fell on Thursday as energy shares slumped, with the broad S&P 500 handing back some gains from the prior session sparked by a policy statement from the Federal Reserve that was more dovish than expected.
US stocks had rallied more than 1 percent on Wednesday as investors, who had sold equities ahead of the meeting, were relieved by the Fed’s statement which cut economic growth and inflation projections and indicated it was in no rush to hike interest rates.
But investors will now seek signs of improvement in the US economy to justify the removal of the word “patient” from the central bank’s statement.
“The Fed has painted themselves into a bit of a corner here,” said Keith Bliss, senior vice-president at Cuttone & Co in New York.
“Now they have an issue where they have the potential for weakening economic data and you have this dollar which is like a runaway freight train.”
Weekly initial jobless claims showed the number of Americans filing new claims for unemployment benefits rose only modestly last week, indicating the labor market remained on solid footing.
The US current account deficit widened sharply in the fourth quarter and was the largest since 2012, as a stronger dollar dented exports.
A rebound in the dollar and oversupply concerns weighed on energy shares, with Exxon Mobil down 1.3 percent to $ 84.98 and Chevron off 1.3 percent to $ 105.23.
The S&P energy index fell 1.4 percent as the worst performing of the 10 major S&P sectors.
The Dow Jones industrial average fell 77.49 points, or 0.43 percent, to 17,998.7, the S&P 500 lost 6.79 points, or 0.32 percent, to 2,092.71 and the Nasdaq Composite added 11.47 points, or 0.23 percent, to 4,994.30.
The Philadelphia Federal Reserve Bank’s business activity index also disappointed, showing factory activity in the US mid-Atlantic region fell for a fourth consecutive month to its lowest level in more than a year.
Lennar shares edged up 0.1 percent to $ 49.76, giving up earlier gains that pushed the stock to a high of $ 51.20 after it reported a 47 percent jump in quarterly profit.
Guess Inc shares surged 16.2 percent to $ 19.46 after quarterly profit beat analyst estimates as the apparel retailer’s expenses declined and online business grew.
Declining issues outnumbered advancing ones on the NYSE by 1,860 to 1,066, for a 1.74-to-1 ratio; on the Nasdaq, 1,336 issues rose and 1,256 fell, for a 1.06-to-1 ratio favoring advancers.
The benchmark S&P 500 was posting 31 new 52-week highs and no new lows; the Nasdaq Composite was recording 109 new highs and 16 new lows.
Copyright Reuters, 2015
