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Wednesday, January 19, 2022

Wall St retreats after Fed-fueled rally; energy falls

Wall St retreats after Fed-fueled rally; energy fallsNEW YORK: US stocks opened modestly lower on Thursday in the wake of a rally in the prior session after the Federal Reserve cut economic growth and inflation projections and indicated it was in no rush to hike interest rates.

U.S. stocks had rallied more than 1 percent on Wednesday as investors, who had sold equities ahead of the meeting, were relieved by Fed Chair Janet Yellen’s dovish outlook.

But investors will now seek signs of improvement in the U.S. economy after Yellen “removed the word ‘patient’ but underscored the need for patience”, said Peter Kenny, chief market strategist at Clearpool Group in New York.

“Yesterday’s rally has all the appearances of being a one-day pop,” he said. “She’s basically told markets it’s later rather than sooner. That provides some buoyancy for the markets, but it’s going to take significantly more than that for the markets to move higher. Better economic data would be a very important component.”

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 U.S. current account deficit widened sharply in the fourth quarter and was the largest since 2012, as a stronger dollar dented exports.

The Dow Jones industrial average fell 67.92 points, or 0.38 percent, to 18,008.27, the S&P 500 lost 6.22 points, or 0.3 percent, to 2,093.28 and the Nasdaq Composite added 7.68 points, or 0.15 percent, to 4,990.51.

The Philadelphia Federal Reserve’s business survey is due at 10:00 a.m.

Lennar shares were up 1.8 percent to $ 50.60 after it reported a 47 percent jump in quarterly profit as it sold more higher-priced homes. The PHLX housing index gained 0.4 percent.

Guess Inc shares jumped 9 percent to $ 18.25 after quarterly profit beat analyst estimates as the apparel retailer’s expenses declined and online business grew.

Energy shares slumped, with Exxon Mobil down 1.2 percent to $ 85.06 and Chevron off 1.6 percent to $ 105.01 on renewed oversupply concerns. The S&P energy index fell 1.6 percent as the worst performing of the 10 major S&P sectors.

Declining issues outnumbered advancing ones on the NYSE by 1,916 to 754, for a 2.54-to-1 ratio on the downside; on the Nasdaq, 1,085 issues fell and 1,070 advanced for a 1.01-to-1 ratio favoring decliners.

The S&P 500 was posting 13 new 52-week highs and no new lows; the Nasdaq Composite was recording 47 new highs and 4 new lows.

Copyright Reuters, 2015

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