NEW YORK: Wall Street stocks finished lower following a choppy session on Tuesday (Feb 28) as consumer confidence data disappointed while US Treasury bond yields edged lower.
The Conference Board’s reading of consumer confidence fell again in February, despite analyst expectations of a pick-up as survey participants expressed worry about future employment and business conditions.
But in a favourable development for stocks, the yield on the 10-year US Treasury note retreated.
Stocks have been buffeted in recent sessions by fears the Federal Reserve (Fed) will prolong its policy of aggressive interest rate increases.
“Today, there really was no conviction in one direction or another,” said Steve Sosnick, chief strategist at Interactive Brokers.
“There weren’t many catalysts today,” he added.
The Dow Jones Industrial Average fell 232.39 points, or 0.71%, to 32,656.7, the S&P 500 lost 12.09 points, or 0.30%, to 3,970.15 and the Nasdaq Composite dropped 11.44 points, or 0.1%, to 11,455.54.
For the month, the S&P 500 fell 2.61%, the Dow slid 4.19% and the Nasdaq shed 1.11%.
After a strong performance in January, stocks retreated in February as economic data and comments from Fed officials prompted market participants to reconsider the odds the central bank would raise rates to a higher level than market forecasts and keep them elevated for longer than was initially expected.
“The market in many ways expected things to go south more quickly, forcing the Fed to pivot, or pause, or cut rates sooner than the Fed was saying,” said Johan Grahn, head ETF market strategist at Allianz Investment Management in Minneapolis.
“The staying power of the Fed is much more determined and steadfast than the staying power of investors so it’s back to the old mantra of do you really want to fight the Fed on this and in this case it is still a mistake to try and do that.”
Traders have started to price in the chances of a bigger 50 basis-point rate hike in March, although the odds remain low at about 23%, according to Fed fund futures, which suggest rates peaking at 5.4% by September, up from 4.57% now.
BofA Global Research cautioned the Fed could even raise interest rates to nearly 6%.
Among individual companies, Target gained 1% following mixed earnings. The big-box retailer topped analyst estimates for profits in the just-finished quarter, but projected lower-than-expected earnings for the current quarter.
Goldman Sachs shed 3.8% as it signalled it may sell its businesses tailored around Main Street consumers in a retreat from a much-touted initiative from a few years ago. – AFP, Reuters
After a strong performance in January, stocks retreated in February. – AFPpic