Closing Market Summary: Shaky Thursday Ends on a Mixed NoteThe stock market endured a shaky session on Thursday as the major averages backed away from recent rebound highs. Today's decline was goaded by a lack of sector leadership from the heavyweight technology (-0.1%) and financial (-0.1%) sectors, uncertainty over whether the European Central Bank has reached its easing limits, and losses in crude oil. The Nasdaq Composite (-0.3%) ended behind the Dow Jones Industrial Average (UNCH) and the S&P 500 (UNCH).
Today's trade took on a sell the news posture despite the ECB's latest policy statement exceeding investors expectations regarding the size and scope of the central bank's easing program. To that point, the ECB lowered its interest rate corridor and expanded the amount of its monthly asset purchases to 80 billion euros. To be fair though, participants likely responded to comments from ECB President Mario Draghi, which cast doubts on future interest rate cuts. As a result, equity markets pulled back from their early highs.
On the domestic front, the two top-weighted sectors of the S&P 500 underperformed the broader market as technology (-0.1%) and the financial sector (-0.1%) trimmed their month-to-date advances to 2.9% and 3.9%, respectively. Meanwhile, doubts regarding the likelihood of a production cap between OPEC and non-OPEC states weighed on crude oil. Consequently, WTI crude surrendered 1.2% ($37.78/bbl) and forced energy (UNCH) near the bottom of the leaderboard.
In the influential technology space (-0.1%), the underperformance of heavyweight components Apple (AAPL 101.17, +0.05) and Microsoft (MSFT 52.05, -0.79) brought the broader sector to its worst level of the day (-1.5%). However, both names were able to recover from their respective lows. Apple saw increased buying interest after it announced an event on March 21, where it is expected to refresh its product line. Separately, the high-beta chipmakers outperformed in the group, evidenced by the 0.5% gain in the PHLX Semiconductor Index.
Asset management companies underperformed in the economically-sensitive financial sector (-0.1%) throughout the day. To that point, Franklin Resources (BEN 36.76, -0.65) tumbled 1.7% in continuation of yesterday's move lower. Elsewhere, the money center banks ended their day on a mixed note with Bank of America (BAC 13.27, +0.13) climbing 1.0% while JPMorgan Chase (JPM 58.61, -0.51) ended lower by 0.9%.
Conversely, health care (+0.1%), consumer discretionary (+0.2%), telecom services (+0.5%), and materials (+0.5%) topped the leaderboard.
In the heavyweight health care space (+0.1%), biotechnology underperformed, evidenced by the 0.8% loss in the iShares Nasdaq Biotechnology ETF (IBB 255.08, -2.05). The ETF has now surrendered 23.0% year-to-date, compared to the 6.9% loss in the broader health care sector.
The U.S. Dollar Index (96.19, -0.98) finished near its session low as the yen and euro maintained their respective advances against the greenback. The euro/dollar pair rose 1.7% to 1.1181 after trading as low as 1.0849. Meanwhile, the dollar/yen tumbled 0.2% (113.14) after trading as high as 114.40.
The Treasury complex moved sharply lower in the morning, retracing a portion of that move in the afternoon. The yield on the 10-yr note fell from its best level of the day (1.95%) to end its session higher by five basis points at 1.93%.
Today's participation fell in-line with the recent average as more than 1.019 billion shares changed hands at the NYSE floor.
Today's economic data included weekly initial and continuing claims and the Treasury Budget for February:
- The latest initial claims report has produced more encouraging news that should help highlight the burgeoning divergences between the ECB and the Federal Reserve.
- Initial claims for the week ending March 5 were 259,000 (consensus 275,000), a decrease of 18,000 from the prior week.
- There were no special factors behind the drop in claims, which are at the lower end of the 250,000 to 300,000 range that has persisted since July 2014. The four-week moving average fell to 267,500 from 270,000.
- Continuing claims for the week ending February 27 were 2.225 million (consensus 2.251 million), a decrease of 32,000 from the prior week.
- The latest reading left the four-week moving average for continuing claims at 2.252 million versus 2.257 million previously.
- The Treasury Budget for February showed a deficit of $192.6 billion, nearly matching the deficit of $192.4 billion for the same period a year ago.
- The Treasury data are not seasonally adjusted, so the February deficit cannot be compared to the January surplus of $55.2 billion.
- Total receipts in February were $169.1 billion while total outlays were $361.8 billion. Receipts were $29.8 billion more than receipts in February 2015 while total outlays were $30.0 billion more than February 2015.
- The 12-month deficit was little changed at $405.52 billion versus $405.26 billion in January.
Tomorrow's economic data will be limited to Febraury Import/Export Prices, which will be reported at 8:30 ET.
- Nasdaq Composite -6.9% YTD
- Russell 2000 -6.4% YTD
- S&P 500 -2.7% YTD
- Dow Jones -2.5% YTD
MainFirst Pre Mkt Indications
*VW-America CEO Michael Horn to leave co,Woebcken interim CEO.......+0.5%
*BAYER-Plans to take on Monsanto in Brazil with GMO Soybean seed....+0.25%
*LINDE-Rev 4.39b(4.44),OP 994m(998),Ebit 510m(515),NI 289m(299).....-0.5% *CARREFOUR-Op Inc 2.45b(2.45),Cuts debt by 408m,Divi 70c(74)........-1% *BOSS-Div 3.62(3.65),Confirms 2016 Ebitda,Reviewing costs...........+1% *ILIAD-Sales 4.41b(4.43),Ebitda 1.5b(1.48),slight rise in Capex.....-1% *LAGARDERE-FY Net €74m(154),Ebit €378m(390),Divi €1.30..............-3%
*K&S-Sales 4.18b(4.26),Ebit 781.6m(796.1),Ebitda 1.06b(1.07)........+2%
*LEG IMMOB-FY FFO 206m(206),Div 2.26(2.26),outlook ok...............+1%
*DB1-Nasdaq agrees to buy ISE from Deut Boerse for $1.1bln..........+1%
*SUNRISE-Net -113m(-112),Rev 1.97b(1.97)Ebitda 627m(625)............+2%
*FRAPORT-Feb Passengers +3.8%,Cargo -1.7%,Movements +3.8%...........U/C
*YOOK-Ebitda €133.1m(126.62),Rev €1.7b(1.66),O/L reasonable.........+0.5%
*BPOST-Q4 Rev 642.9m(639.3),Dom Mail -3.9%(-5),Net 95.6m(71.1)......+1%
*GATEGROUP-Sales 2996.4m(2980)Ebitda 169.4m(166.7),Div 30c..........+1%
*HANNOVER RE-Ebit 565m(405),Net 365m(272),Prem 4.1b(3.93),o/l +ve...+1%
TELECOM ITALIA Il Sole reports that Vivendi was not pleased with the comments by Orange’s CEO concerning being open to consider a merger with TI if invited to do so. Also reported comments from the Italian Governement clarifying that they never said that they would be happy about an Orange / TI merger.
Dow+0.21% S&P+0.51% Nasdaq+0.55% Russell+0.46%
US MArket closed higher helped by a rebound on oil. WTI crude ended its day higher by 4.8% at $38.23/bbl. Energy was best performer followed by Heavy tech that balanced financials weakness. energy space managed to re-enter positive territory for the year with today's trade, as the group shows a gain of 0.7% over that period. Telecom was worst performer. volume were below average with 933mil shares. US After Hours XOMA +21.7%, OGXI +14.3%, CNAT +13.5%, BOX +12.5%, PEIX +10.5%, OME -21.4% following earnings/guidance, EXXI-37% on Reuters article on possible bankruptcy. Asian equity markets are mixed to positive, tracking the modest rally on Wall St, as investors prepare for Thursday's mammoth ECB decision amid growing expectations of further policy easing. China Feb CPI of 2.3% hit its highest level since July 2014, though the food components spiked up to 7.3% from 4.1% going into the Lunar New Year while non-food CPI actually slowed to 1.0% v 1.2% prior. There was also increasingly more chatter devoted to China's property sector - a PBoC official warned about the risks of a "subprime"-like crisis in housing, adding that regulators should only incentivize activity in 3rd-tier and 4th-tier cities rather than the 1st-tier cities where prices have already heated up. With the debate about the need to delay the 2nd round of sales tax hikes in Japan heating up, BOJ Gov Kuroda said the next increase will likely have about half of the impact relative to the first, which sent Japan into recession. Kuroda did acknowledge that the impact of that initial hike was bigger than anticipated.
Nikkei +1.26% Hang Seng +0.45% Shanghai-0.85%
Eur$ 1.0981 CNH 6.5176 CNY 6.5157 JPY 113.68 GBP 1.4202
Macro :
China Feb. Consumer Prices +2.3% Y/y; Est. +1.8%
China Feb. Vehicle Sales 1.58m Units vs 2.5m Units in January
Keep an eye on :
- ABG SM : Abengoa Said to Be Reviewing Creditors’ Restructuring Plan
- ABI BB : AB InBev Procurement Chief Milikin Sells EU2.05m of Stock
- ABN NA : ABN Amro, SBM Offshore to Join AEX Index, Euronext Says
- ALT FP : Altran Raises Dividend by 27%, Sees More Profitable Growth 2016
- POST AV : Austrian Post Maintains Dividend, Targets Stable Operating Ebit
- AV/ LN : Aviva to Sell Health Insurance Ops in Ireland to Irish Life
- BAYN GY : Bayer Plans to Introduce Modified Soybeans in Brazil This Yr
- BOL SS : Boliden to Acquire Finnish Kevitsa Mine for $712m Consideration
- GBB FP : Bourbon Sees ‘Moderate Decline’ in 2016 Adjusted Revenue
- BPOST BB : Bpost Adj. Ebitda Forecast Meets Ests.; Sees Stable Dividend
- BWO AV : Immofinanz to Offer 10m Buwog Shrs in Accelerated Bookbuilding
- CA FP : Carrefour 2015 Recurring Oper. Income In Line, Div. Misses
- FCA IM : Reportedly announcing changes to US standalone strategy for Fiat brand; informs dealers they can now close standalone Fiat showrooms
- GFT FP : Vivendi unlikely to raise Gameloft offer in the absence of a rival bid - MergerMarket
- HNR! GY : Hannover Re 4Q Profit Rises 26%; Plans to Pay Special Dividend
- BOSS GY : Hugo Boss Takes Steps to Address U.S., China; Div. Below Ests.
- ILD FP : Iliad 2015 Ebitda Meets, Net Income Misses Ests.
- IIA AV : Immofinanz Sold 10m Buwog Shares for EU171m
- ISP IM : Intesa CEO Says Negative Rates Not Sustainable: Handelsblatt
- INW IM : Telecom Italia Said to Seek at Least EU5 a Share for Inwit
- INW IM : Inwit: Cellnex/F2i consortium to present offer on 14 March
- BAER VX : Edmond de Rothschild (Suisse) Reports Record Net Inflow CHF8.2b
- KARN SW : Kardex 2015 Net Rises 8.4%, Raises Dividend, Sees Demand Growth
- SDF GY : K+S 4Q Revenue Misses Est., Div. Beats; Prudent on 2016 Outlook
- MMB FP : Lagardere Sees Recurring Ebit Growth Over 10%; Div. Unchanged
- LEG GY : LEG Immobilien 2015 FFO Exceeds Forecast; Raises Dividend
- LIN GY : Linde 4Q Oper. Profit In Line; Sees Challenging Mkt Environment
- LSE LN : Deutsche Boerse/LSE to Change Chairman in 3 Yrs: Handelsblatt
- MRB FP : Mr Bricolage 2015 Net EU9.6M vs EU14.0M; Div. EU0.30/Shr
- 1913 HK : Prada Has ‘No M&A Possibilities,’ Rally Isn’t Sustainable: Bocom
- RFRG NA : Refresco Gerber 4Q Rev. Misses Ests., 2015 Adj. Ebitda In Line
- RTL BB : RTL 2015 Rev., Ebit In Line; Sees Moderate Rev. Growth in 2016
- SBMO NA : ABN Amro, SBM Offshore to Join AEX Index, Euronext Says
- SAHN SW : Schaffner Sees 1H Op. Loss; to Implement Measures to Boost Earns
- SIE GY : Werner Wenning Is Candidate to Succeed Cromme at Siemens: RP
- SKFB SS : SKF Says Peugeot Filed Lawsuit With Damage Claims
- GLE FP : Societe Generale to Cut 550 Jobs in Network Reorganization
- SO FP : Somfy 2015 Net EU165M vs EU38.1M; Despature Named Chairman
- SRCG SW : Sunrise Communications Sees Rev., Adj. Ebitda Declining in 2016
- VIV FP : Vivendi unlikely to raise Gameloft offer in the absence of a rival bid - MergerMarket
- VOW3 GY : Volkswagen America CEO Michael Horn to Leave Company
- YNAP IM : Yoox Net-A-Porter Sees Further Rev. Growth in 2016
>>> Up
*AUTO TRADER RAISED TO BUY VS ADD AT PEEL HUNT
*BHP BILLITON RAISED TO ADD VS REDUCE AT ALPHAVALUE
*GEBERIT RAISED TO OUTPERFORM AT RBC CAPITAL
*HORIZON TECHNOLOGY RAISED TO OUTPERFORM AT OPPENHEIMER
*INTU PROPERTIES RAISED TO OUTPERFORM VS NEUTRAL AT MACQUARIE
*ROGERS CORP. RAISED TO BUY AT B. RILEY
*WHITBREAD RAISED TO HOLD AT JEFFERIES
>>> Down
*ALAMOS GOLD INC CUT TO SECTOR PERFORM AT RBC CAPITAL
*ANTERO RESOURCES CUT TO NEUTRAL VS OUTPERFORM AT ROBERT BAIRD
*G4S CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*G4S CUT TO SELL AT NORDEA
*GENEL ENERGY CUT TO SECTOR PERFORM AT RBC CAPITAL
*LAGARDERE CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*RANGE RESOURCES CUT TO NEUTRAL VS OUTPERFORM AT ROBERT BAIRD
*RBS CUT TO MARKET PERFORM AT BERSTEIN
*RESTAURANT GROUP CUT TO NEUTRAL VS BUY AT GOLDMAN
*RESTAURANT GROUP CUT TO HOLD VS BUY AT BERENBERG
*RWE CUT TO SELL VS NEUTRAL AT UBS
>>> Reiteration
>>> Initiation
*ASHTEAD RATED NEW SELL AT DEUTSCHE BANK, PT 660P
*DEUTSCHE BETEILIGUNGS RATED NEW BUY AT BANKHAUS LAMPE, PT EU35
*METRO BANK PLC RATED NEW BUY AT JEFFERIES
>>> Call
>> Stock
*RESTAURANT GROUP REMOVED FROM CONVICTION LIST AT GOLDMAN
Asian Market Update: China inflation spikes on rising food costs; RBNZ surprises with a rate cut, while BOK remains dovish in a hold
***Economic Data***
- (CN) CHINA FEB CPI Y/Y: 2.3% V 1.8%E; highest level since July 2014
- (CN) CHINA FEB PPI Y/Y: -4.9% V -4.9%E; 48th consecutive month of decline; smallest decline in 8 months
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) CUTS OFFICIAL CASH RATE BY 25BPS TO 2.25% (record low); NOT EXPECTED
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
- (AU) AUSTRALIA MAR CONSUMER INFLATION EXPECTATION: 3.4% V 3.6% PRIOR; 6-month low
- (JP) JAPAN FEB PPI M/M: -0.2% V -0.3%E; Y/Y: -3.4% V -3.4%E
- (UK) FEB RICS HOUSE PRICE BALANCE: 50% V 50%E
***Index Snapshot (as of 05:30 GMT)***
- Nikkei225 +1.4%, S&P/ASX flat, Kospi +0.8%, Shanghai Composite -1.1%, Hang Seng +0.8%, Mar S&P500 +0.1% at 1,990
***Commodities/Fixed Income***
- Apr gold -0.5% at $1,251/oz, Apr crude oil -0.2% at $38.23/brl, May copper +0.2% at $2.24/lb
- (SA) Saudi Arabia to keep full contracted oil supply to Asia in April - financial press
- (CN) PBOC SETS YUAN MID POINT AT 6.5129 V 6.5106 PRIOR; 2nd straight weaker setting
- (CN) PBOC to inject CNY20B in 7-day reverse repos
- JGB: (JP) Japan MoF sells ¥2.29T in 0.1% (0.1% prior) 5-year JGBs; Avg yield: -0.142% v -0.138% prior; Bid-to-cover: 3.59x v 3.57x prior
- (JP) Japan investors net buy ¥1.54T in foreign bonds v net buy ¥934B in prior week; Foreign investors net sell ¥139B in Japan stocks v net sell ¥1.01T in Japan stocks in prior week
***Market Focal Points/FX***
- Asian equity markets are mixed to positive, tracking the modest rally on Wall St, as investors prepare for Thursday's mammoth ECB decision amid growing expectations of further policy easing. In the Asia-Pacific, RBNZ got the ball rolling with a surprise 25bp rate cut, while the Bank of Korea maintained its cautious rhetoric in a split-decision hold. China inflation data was somewhat hotter than expected, but the bulk of the gains was due to pre-holiday spike in food costs. In FX, NZD/USD fell over 150pips in the wake of the rate decision to 0.6620, AUD/USD was down about 20pips below 0.7470, USD/JPY rallied 70pips toward 113.80, and EUR/USD came in about 30pips to 1.0970 session low.
- China Feb CPI of 2.3% hit its highest level since July 2014, though the food components spiked up to 7.3% from 4.1% going into the Lunar New Year while non-food CPI actually slowed to 1.0% v 1.2% prior. There was also increasingly more chatter devoted to China's property sector - a PBoC official warned about the risks of a "subprime"-like crisis in housing, adding that regulators should only incentivize activity in 3rd-tier and 4th-tier cities rather than the 1st-tier cities where prices have already heated up.
- RBNZ cut its cash rate to 2.25% against majority expectations of a rate hold at 2.5% and also lowered its forecast for 2016 end CPI to 1.1% (1.6% prior), GDP to 0.7% (0.8% prior), and 90-day bill rate to 2.2% (2.6% prior). In its statement, RBNZ cited deteriorating global growth, weakness in China, slowdown in Europe, and expectations of longer period required to reach inflation target in New Zealand against the backdrop of higher trade-weighted exchange rate since the last decision in explaining its rationale. Gov Wheeler remarked that the outlook implies potentially one more rate cut this year, though he also maintained that economic data could still change those projections.
- Bank of Korea stayed on hold at 1.50% as expected but reiterated that inflation remains low, consumption is weakening, economic sentiment is sluggish, and exports are soft. BOK also noted increased uncertainty on oil prices and global central bank policies. BOK Gov Lee later added that inflation would likely remain around 1% for some time, and that the BOK is monitoring capital flows.
- With the debate about the need to delay the 2nd round of sales tax hikes in Japan heating up, BOJ Gov Kuroda said the next increase will likely have about half of the impact relative to the first, which sent Japan into recession. Kuroda did acknowledge that the impact of that initial hike was bigger than anticipated. Separately, Fin Min Aso expressed his support for that 2nd round of tax hikes, stating that higher rates were unavoidable but that it would ultimately be up to PM Abe to decide on the timing.
***Equities***
US equities / ADRs:
- BOX: Reports Q4 -$0.26 v -$0.29e, R$85.0M v $81.7Me; +11.8% afterhours
- SQ: Reports Q4 -$0.20 (ex $0.14 stock div*) v -$0.14e, Total Rev $374M v $341Me; +0.3% afterhours
- OME: Reports Q4 $0.29 v $0.48e, R$82.3M v $109Me (2 est); -22.6% afterhours
Notable movers by sector:
- Consumer discretionary: Surfstitch Group SRF.AU +11.0% (CEO resigns)
- Financials: Ping An Bank Co 000001.CN -0.8% (FY15 result); Dalian Wanda Commercial Properties 3699.HK +0.9% (YTD result)
- Industrials: Daewoo Shipbuilding & Marine 042660.KR +5.1% (expects Q1 profit); China Rongsheng Heavy Industries Group 1101.HK +11.7% (to settle debt issue)
- Materials: Lynas Corp.LYC.AU -6.2% (H1 result)
Inwit: Cellnex/F2i consortium to present offer on 14 March
Cellnex [BME:CLNX], the Spanish telecom infrastructures group controlled by Abertis is expected to present its offer for a 45% stake in Telecom Italia tower unit Inwit on Monday 14 March, Expansion reported citing a newswire. If it is able to complete the transaction, Cellnex will become Italy’s dominant operator, adding Inwit’s 11,500 towers to the 7,800 towers it already controls in that country, the Spanish-language paper noted.
Cellnex and F2i, the Italian fund, are working on a binding offer for 45% of Inwit. Telecom Italia controls 60% of Inwit and the other 40% is listed in the Italian stock market. Telecom Italia intends to sell a 45% stake, which would trigger a compulsory full takeover bid whereby the buyer would control 85% while Telecom Italia retains 15%, Expansion said.
According to Italian press reports cited in the Expansion report, the binding offer presented in December by the Cellnex / F2i consortium valued 45% of Inwit at around EUR 1.26bn.
This news service earlier today (10 March) reported that the Italian press said Cellnex and F2i may be considering to withdraw their bid for Inwit because the seller appears to favour rival bid by Ei Towers [BIT:EIT], the Italian transmission tower group controlled by Mediaset [BIT:MS].
According to Expansion Ei Towers is offering EUR 5 per share but only for 29.9% of Inwit to avoid having to make a full takeover bid.
A third suitor, American Tower, is offering c. EUR 4 per share, the report said.
After Hours Summary: XOMA +21.7%, OGXI +14.3%, CNAT +13.5%, BOX +12.5%, PEIX +10.5%, OME -21.4% following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: XOMA +21.7%, OGXI +14.3%, CNAT +13.5%, BOX +12.5%, PEIX +10.5%, MXPT +6.2%, TLRD +5.8%, BIOC +4.8%, SPPI +2.8%
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: OME -21.4%, CCRN -14.5%, VVUS -4.6%
Companies trading lower in after hours in reaction to news: EXXI -37.0% (amid the release of a Reuters article detailing a cautionary statement from an EXXI filing out Monday night in which it cautioned about the potential of a bankruptcy filing absent a material improvement in oil and gas prices or other factors), GPOR -2.5% (commenced 14 mln common stock offering), BCS -2.1% (commenced 4 mln common stock offering).
Closing Market Summary:Oil Bolsters Indices at Mid-WeekThe major averages ended their midweek affair on a higher note as a leg higher in oil supported a modest gain in the stock market. Additionally, leadership from the heavyweight technology sector (+1.0%) countered some choppy trade from the likes of the financial (+0.1%), consumer discretionary (+0.1%), and health care (+0.2%) sectors. Today's action preceded tomorrow's policy statement from the European Central Bank, which is widely believed to call for additional stimulus measures. The Nasdaq Composite (+0.6%) settled ahead of the S&P 500 (+0.5%) and the Dow Jones Industrial Average (+0.2%).
Equities displayed modest gains in the early going, reaching their best levels shortly after the release of the Department of Energy's weekly inventory report. The report showed that crude oil inventories rose in-line with analyst estimates, but that gasoline inventories experienced a larger-than-expected draw (4.53 million; consensus 1.39 million). This echoed the results of the API report and led to a bid in crude oil, as investors believed that drawdowns in gasoline inventories would drive increased demand in oil for future refining. As a result, WTI crude ended its day higher by 4.8% at $38.23/bbl.
Commodity-sensitive energy (+1.5%) was able to take advantage of this swing in oil prices, climbing the leaderboard. Meanwhile, the top-weighted technology sector (+1.0%) finished in the second spot.
In the energy sector (+1.5%), oil and gas refining names were able to outperform as Marathon Petroleum (MPC 37.06, +1.89) gained 5.4%. Meanwhile, Dow component Chevron (CVX 92.82, +4.08) managed to top the price-weighted index as it climbed 4.6%. The energy space managed to re-enter positive territory for the year with today's trade, as the group shows a gain of 0.7% over that period.
Heavily-weighted technology (+1.0%) received a boost from large-cap component Microsoft (MSFT 52.84, +1.19), which managed to reclaim its 50-day moving average (52.24). Separately, Cisco Systems (CSCO 27.61, +0.56) benefited from some M&A news as the company announced that it would be acquiring Synata for an undisclosed amount.
On the bottom of the leaderboard, telecom services (-0.3%) led the downside while heavily-weighted financials (+0.1%), consumer discretionary (+0.1%), and health care (+0.2%) underperformed. Biotechnology weighted on the health care space as the iShares Nasdaq Biotechnology ETF (IBB 257.13, 3.00) surrendered 1.2%.
In the economically sensitive financial sector (-0.1%), Morgan Stanley (MS 24.61, -0.40) surrendered 1.6%. The company has plunged 4.8% since Monday whereas the broader sector has lost 1.6% over that period. Meanwhile, Franklin Resources (BEN 37.41, -0.59) tumbled 1.6% after the company reported that preliminary month-end assets under management totaled $714 billion compared to the $728.1 billion under management in January.
Chipotle Mexican Grill (CMG 506.63, -18.06) displayed relative weakness in the consumer discretionary space (+0.1%) after it was confirmed that one of the sick employees at its Billerica, Massachusetts location was infected by norovirus. The location has been cleared to open on Thursday. Separately, large-cap Home Depot (HD 126.03, -0.69) fell 0.5%.
The Dollar Index (97.17, -0.03) ticked up off its session low as the euro/dollar pair backed away from its high of 1.1029 to trade lower by 0.1% at 1.1002. Separately, the dollar/yen pair rose 0.7% to 113.40.
The Treasury complex traded broadly lower throughout the day as the yield on the 10-yr note slipped five basis points to 1.88%.
Today's participation was below the recent average with fewer than 933 million shares changing hands at the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index and the January Wholesale Inventories Report:
- The weekly MBA Mortgage Index was showed a seasonally adjusted increase of 0.2% in mortgage applications.
- Wholesale inventories increased 0.3% in January from an upwardly revised unchanged reading (from -0.1%) for December. The consensus estimate called for a 0.2% decline in January wholesale inventories, which are up 2.0% year-over-year.
- The gain in January was driven by a 1.1% increase in nondurable inventories. Inventories of durable goods actually declined 0.3%.
- The uptick in nondurable inventories was driven by drug (+3.3%) and farm products (+2.9%) inventories. The biggest increase was in paper inventories (+4.2%), although they make up just 3.6% of total nondurable inventories.
- With respect to durable inventories, the biggest weights were the declines in electrical (-3.6%) and metals (-1.8%) inventories. Machinery inventories, which account for 29% of total durable inventories, rose 0.2% after a 0.4% decline in December.
- Wholesale sales dropped 1.3% in January after a 0.6% decline in December. Durable sales were down 1.9% while nondurable sales fell 0.8%.
- The wholesale inventories to sales ratio jumped to 1.35 in January from 1.33 in December. This ratio stood at 1.28 in the same period a year ago.
Tomorrow's economic data includes weekly initial claims (consensus 275k) and the Treasury Budget for February, which will cross the wires at 8:30 ET and 14:00 ET, respectively.
- Nasdaq Composite -6.7% YTD
- Russell 2000 -5.6% YTD
- S&P 500 -2.7% YTD
- Dow Jones -2.4% YTD