Close Update: Stocks Extend Losing Streak as FOMC, Brexit Weighs
Stocks traded lower for a fourth straight day as Wednesday's Federal Open Market Committee meeting and next week's referendum on UK membership in the European Union continued to drive investors into the safety of government securities. The Dow Jones Industrial Average was Tuesday's laggard with financial stocks leading the decliners as bond yields fell further, and defensive stocks in the telecom and utilities sectors outperformed.
Economic data was mostly bullish though not likely to have any significant impact on the Fed's decision tomorrow. Retail sales were up 0.5% in May, beating expectations for a gain of 0.3%. Excluding autos, retail sales rose 0.4%, and were up 0.3% excluding sales of autos and retail gas, both of which were in-line with projections.
Import and export prices showed sizable gains in May: import prices were up 1.4%, nearly double what analysts expected; and export prices jumped 1.1% versus estimates for a 0.2% gain.
Finally, business inventories were up a benign 0.1% in April while sales rose 0.9%. As a result, the inventory-to-sales ratio fell to 1.40 from 1.41 in March.
Oil sold off for a fourth consecutive day as concerns about the global economy pushed the price of crude below $49 per barrel. Although oil was eclipsed by jitters surrounding the FOMC and Brexit, it contributed to today's softer tone and a 0.18% drop in the energy sector.
Wednesday's main event is the conclusion of the FOMC meeting which culminates in an announcement at 2:00ET and press conference at 2:30ET (tomorrow's meeting is "live"). Although odds are in favor of the Fed holding off on another rate hike, Wall Street will sort through the statement for clues on when the next tightening will take place.
Preceding the FOMC is data on producer prices (expected +0.3% nominal, +0.2% core), the Empire State manufacturing survey (expected -3.50), and May industrial production (expected -0.1%) and capacity utilization (expected 75.2%).
Here's where the markets stood at the close:
Dow Jones Industrial Index was down 57.66 points (-0.33%)
S&P 500 was down 3.74 points (-0.18%)
Nasdaq Composite Index was down 4.89 points (-0.10%)
FTSE 100 was down 2.01%
Nikkei 225 was down 1.00%
Hang Seng Index was down 0.61%
Shanghai China Composite Index was up 0.32%
(+) LBIX (+76.92%) Swung to Q1 profit on lower revenue
(+) SGY (+9.22%) Makes deferred interest payment, avoids default
(+) AKAO (+8.44%) Upgraded at Wedbush to outperform from neutral
(-) INFI (-69.16%) Plans to cut workforce by 21%, DYNAMO Phase 2 monotherapy study of duvelisib met primary endpoint
(-) DRAM (-34.02%) Acquires U.S. Goldcorp
(-) MESO (-40.59%) Regained rights to cardiovascular field for cell therapy platform, downgraded to neutral at Credit Suisse
(-) RVNC (-28.01%) DaxibotulinumtoxinA Topical Gel Phase 3 trial failed to meet primary endpoints
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