Wednesday, 25 March 2015 02:34
NEW YORK: US stocks drifted lower on Tuesday, as equities kept in a tight range that corresponded with currency fluctuations as traders focused on the dollar’s strength and its possible effect on corporate earnings.
Declines on the Nasdaq were held in check by a boost from Google, up 2.3 percent to $ 578.24.
Morgan Stanley’s chief financial officer is leaving the bank to join Google.
Data from home sales to inflation and manufacturing indicated the US economy remains strong, but failed to alter expectations of a faster or steeper monetary policy tightening path at the Federal Reserve.
Traders have honed in on how the Fed will react to economic data, as a June interest rate increase remains a possibility. Stocks have been inversely correlated to the US dollar and several multinational companies have given earnings guidance that cited a negative impact from a strong greenback.
“I don’t think there is a tremendous amount of trepidation about earnings season. We will clearly see the impact of lower energy prices as well as the stronger dollar,” said David Lefkowitz, Senior Equity Strategist at UBS in New York.
“Those two factors are fairly well-known, so I don’t expect it is going to be much in the way of a surprise for most companies when they do report earnings, but clearly those temporary factors are going to weigh on the growth for the first quarter.”
The Dow Jones industrial average fell 56.98 points, or 0.31 percent, to 18,059.06, the S&P 500 lost 6.28 points, or 0.3 percent, to 2,098.14 and the Nasdaq Composite.
The dollar index zigzagged between gains and losses and was recently up 0.16 percent on the day. Biotechs were down for a second straight session, pulled lower by a 2-percent drop in Biogen to $ 454.64.
The Nasdaq biotech index is down 2.7 percent for the past two sessions after snapping an eight-day winning streak.
Freeport-McMoRan shares fell 1.1 percent to $ 19.13 after the miner slashed its quarterly dividend by 84 percent, to 5 cents a share from 31.25 cents, citing lower commodity prices.
Whiting Petroleum Corp plunged 19.6 percent to $ 30.88.
North Dakota’s largest oil producer announced an offering of 35 million shares and a $ 1.75 billion mix of notes and convertible notes to help cut its near-$ 6 billion debt load.
Declining issues outnumbered advancing ones on the NYSE by 1,576 to 1,418, for a 1.11-to-1 ratio; on the Nasdaq, 1,398 issues rose and 1,284 fell, for a 1.09-to-1 ratio favoring advancers.
The S&P 500 was posting 21 new 52-week highs and 1 new low; the Nasdaq Composite was recording 95 new highs and 22 new lows.
Copyright Reuters, 2015
