Las Vegas Sun

March 29, 2024

US stock indexes stay stuck; bond yields and dollar rise

NEW YORK — U.S. stock indexes stuck to their holding pattern Wednesday, as the Standard & Poor's 500 index entered its most listless stretch of trading in more than three years. Bond yields and the dollar resumed their moves higher.

KEEPING SCORE: The Standard & Poor's 500 index was virtually flat at 2,268 as of 3 p.m. Eastern time. The Dow Jones industrial average was down 41 points, or 0.2 percent, to 19,785. The Nasdaq composite was close to flat at 5,539. Slightly more stocks fell on the New York Stock Exchange than rose.

REMARKABLY CALM: If the S&P 500 holds where it is, Wednesday will be the ninth straight day where it has swung by less than 0.4 percent, up or down. The last time that happened was in July 2013.

Stocks have been in a wait-and-see period in recent weeks following their torrid run since Election Day. The S&P 500 is up 6 percent since Donald Trump's surprise victory of the White House, driven higher by expectations for lower corporate taxes and less regulation. Trump will take the oath of office on Friday, and investors are waiting to see how much of his campaign-trail rhetoric will turn into policy changes.

"It's natural after such a remarkable run postelection to have a bit of a flat, quiet period as investors wait for some more tangibles," said Katie Nixon, chief investment officer at Northern Trust Wealth Management. "We know directionally where Donald Trump wants to go, and with a Republican Congress he's got a higher probability of success than otherwise, but we don't have the details."

HO HO HUM: One notable area of weakness in the stock market was retail. This past holiday shopping season was weaker than many traditional retailers were expecting, and Target became the latest to cut its forecast for fourth-quarter sales and profits as a result. The discounter said that traffic levels at its stores were disappointing in November and December, and its stock fell $4.38, or 6.2 percent, to $66.56 following its announcement.

Target had one of the biggest losses in the S&P 500, while Dollar Tree and other retailers weren't far behind.

STRAPPED IN: Fastenal jumped $2.56, or 5.3 percent, to $50.82 for the biggest gain in the S&P 500 index. The seller of nuts, bolts and other equipment reported stronger fourth-quarter earnings growth than analysts expected.

FINANCIAL STRENGTH: Citigroup and Goldman Sachs became the latest banks to report stronger earnings for the fourth quarter than analysts expected. Like others, they benefited from strength in their trading operations following the tear higher for stocks since Election Day.

Financial stocks have been leading the way since November on expectations for higher interest rates, stronger economic growth and less regulation.

YIELDS GAIN GROUND: Treasury yields rose, and the yield on the 10-year Treasury climbed to 2.39 percent from 2.33 percent late Tuesday. It more than made up its loss from the prior day, and it continues the steady march higher that bond yields have been on since Election Day. Expectations of higher inflation, along with faster economic growth, have driven the trend.

INFLATION GAUGES: Consumer prices last month were 2.1 percent higher than the same time a year earlier. Economists say the inflation rate is still relatively modest, but it's a clear acceleration from the very low levels of the last four years.

The "Beige Book," a survey of conditions by the Federal Reserve released Wednesday afternoon, showed that the U.S. economy grew a bit faster at the end of last year and that pricing pressures "intensified somewhat" since its last report in November.

The Federal Reserve has raised interest rates twice in the last two years, up from their record low of nearly zero. The central bank has said that it plans for a gradual rise in rates, but a big push higher in inflation could force its hand.

DOLLAR REBOUND: The dollar rose against many of its rivals, a day after it sank sharply against the British pound and others. The dollar rose to 113.69 Japanese yen from 112.66 late Tuesday. The British pound fell to $1.2281 from $1.2396, and the euro fell to $1.0693 from $1.0709.

MARKETS ABROAD: In Asia, Japan's Nikkei 225 index rose 0.4 percent, and Hong Kong's Hang Seng jumped 1.1 percent. South Korea's Kospi index dipped by 0.1 percent.

In Europe, Germany's DAX rose 0.5 percent, and the U.K. FTSE 100 rose 0.4 percent, while France's CAC 40 fell 0.1 percent.

COMMODITIES: Benchmark U.S. crude oil fell $1.40 to settle at $51.08 a barrel. Brent crude, the international standard, fell $1.55 to close at $53.92. Natural gas fell 11 cents to $3.302 per 1,000 cubic feet, heating oil fell 4 cents to $1.61 a gallon and wholesale gasoline fell 5 cents to $1.55 per gallon.

Gold slipped 80 cents to $1,212.10 per ounce, silver rose 13 cents to $17.27 per ounce and copper fell 9 cents to $2.62 a pound.

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