(Alliance News) - Stocks fell, with losses accelerating into the close, as investors brace for another key inflation reading later this week.
Tech stocks were in focus, with Intel hit by a report China will limit the use of foreign chips, while it was all change at the top at Boeing.
On Wall Street, the Dow Jones Industrial Average closed down 162.26 points, 0.4%, at 39,313.64. The S&P 500 fell 15.99 points, 0.3%, at 5,218.19 while the Nasdaq Composite declined 44.35 points, 0.3%, to 16,384.47.
Recent strong gains in equities have left investors pondering whether the dizzy heights can be maintained.
Strategists at Goldman Sachs are sticking with their year-end prediction of 5,200 for the S&P 500.
"Both our expected path of the federal funds rate and our above-consensus economic growth forecast appear to already be priced by markets," Goldman said.
The investment bank said a "shift in the interest rate outlook without a deterioration in the economy is necessary for the market rally to broaden."
This week's main market event will be the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge.
But investors will have to wait until Friday - when the market is closed - for this latest piece in the inflation jigsaw puzzle which will provide the US central bank with another pointer ahead of an expected cut to interest rates later this year.
JPMorgan estimates that the core PCE price index rose 0.3% in February, taking the annual increase to 2.8%.
In economic news on Monday, sales of new single‐family houses fell unexpectedly in February, figures showed.
The Commerce Department said sales declined to a seasonally adjusted annual rate of 662,000 in February, down 0.3% from the revised January rate of 664,000. The figure was still 5.9% higher than the 625,000 reported in February 2023.
The figure was below a Bloomberg-cited consensus of 677,000.
The median sales price of new houses sold in February was USD400,500, the Commerce Department said, down 7.6% from the year before. The average sales price was USD485,000.
Economists at Barclays explained new home sales are measured at the time of contract signing, so reflect a more current picture of mortgage rates than existing home sales, which are measured at the time of closing.
"As such, this minimal downward move makes sense given the similarity of mortgage rates to the prior month," Barclays commented.
"However, the overall downward momentum in mortgage rates may provide upward momentum to new home sales in future months; additionally, buyer traffic has continued to trend upwards since November, giving stronger signs of increased demand," Barclays suggested.
The pound rose to USD1.2638 late Monday, from USD1.2594 on Friday. The euro traded at USD1.0837, up from USD1.0805 on Friday.
Versus the yen, the greenback was little changed at JPY151.46 compared with JPY151.43.
On Wall Street, Boeing rose 1.3% after it announced that its chief executive officer and chair both intend to step down from their posts this year.
The Arlington, Virginia-based aerospace company said CEO Dave Calhoun will resign at the end of 2024, while Chair Larry Kellner, will not stand for re-election at its next annual shareholder meeting.
Boeing said former Qualcomm CEO Steve Mollenkopf, who has served on the board since 2020, will succeed Kellner as chair and lead the process to select CEO Calhoun's successor.
Boeing also named Chief Operating Officer Stephanie Pope as the new CEO of Boeing Commercial Airplanes, effective immediately, as its current leader Stan Deal retires.
Bank of America said the changes were "positive for investors," noting Boeing is in need of "drastic cultural overall".
"We see the changes as the first right steps of removing the "old guard", and making way for a new team which can work from a less sullied slate," BofA analysts said in a research note.
"The new CEO will be coming into a Boeing which has been playing a reactionary defense for quite some time, however the best leaders are forged in fire. This may be the first real chance, in a long time, Boeing has had to clean-house and reset their own narrative."
Intel fell 1.7% following a Financial Times report that China will phase out microprocessors from the firm and its peer, Advanced Micro Devices, so they cannot be used in government computers and servers under new guidelines.
AMD fell 0.6%.
The stricter new regulations also aim to sideline Microsoft's Windows operating system, in a shift towards domestic options, the report said.
Microsoft retreated 1.4%.
The new guidelines by the Ministry of Industry & Information Technology orders government agencies and party organs to include criteria requiring "safe and reliable" processors and operating systems when it comes to purchases.
The European Union hit Apple, Google parent Alphabet and Meta Platforms with the first ever probes under a mammoth digital law, which could lead to big fines against the US technology companies.
The European Commission, the EU's antitrust regulator, announced that it "suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA" – the bloc's Digital Markets Act.
Since March 7, six of the world's biggest tech companies – Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta and Microsoft – have had to comply with the EU's landmark DMA after being named so-called "gatekeepers".
Shares in Apple fell 0.8%, Amazon rose 0.5% and Meta declined 1.3%.
In London on Monday, the FTSE 100 closed down 0.2%. Frankfurt's DAX 40 closed up 0.3% while the CAC 40 in Paris ended marginally lower.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 1.2%. In China, the Shanghai Composite fell 0.7%, while the Hang Seng index in Hong Kong lost 0.2%. The S&P/ASX 200 in Sydney closed up 0.5%.
Brent oil rose to USD86.77 a barrel on Monday from USD85.48 on Friday. West Texas Intermediate climbed to USD81.91 a barrel from USD80.87.
The price of gold firmed to USD2,170.94 an ounce on Monday, compared to USD2,181.60 on Friday.
Tuesday's global economic calendar sees US durable goods orders figures at 1230 GMT and a US consumer confidence reading at 1500 GMT.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News
NEW YORK MARKET CLOSE: Stocks ease while Boeing shakes up its top-team
(Alliance News) - Stocks fell, with losses accelerating into the close, as investors brace for another key inflation reading later this week.
Tech stocks were in focus, with Intel hit by a report China will limit the use of foreign chips, while it was all change at the top at Boeing.
On Wall Street, the Dow Jones Industrial Average closed down 162.26 points, 0.4%, at 39,313.64. The S&P 500 fell 15.99 points, 0.3%, at 5,218.19 while the Nasdaq Composite declined 44.35 points, 0.3%, to 16,384.47.
Recent strong gains in equities have left investors pondering whether the dizzy heights can be maintained.
Strategists at Goldman Sachs are sticking with their year-end prediction of 5,200 for the S&P 500.
"Both our expected path of the federal funds rate and our above-consensus economic growth forecast appear to already be priced by markets," Goldman said.
The investment bank said a "shift in the interest rate outlook without a deterioration in the economy is necessary for the market rally to broaden."
This week's main market event will be the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge.
But investors will have to wait until Friday - when the market is closed - for this latest piece in the inflation jigsaw puzzle which will provide the US central bank with another pointer ahead of an expected cut to interest rates later this year.
JPMorgan estimates that the core PCE price index rose 0.3% in February, taking the annual increase to 2.8%.
In economic news on Monday, sales of new single‐family houses fell unexpectedly in February, figures showed.
The Commerce Department said sales declined to a seasonally adjusted annual rate of 662,000 in February, down 0.3% from the revised January rate of 664,000. The figure was still 5.9% higher than the 625,000 reported in February 2023.
The figure was below a Bloomberg-cited consensus of 677,000.
The median sales price of new houses sold in February was USD400,500, the Commerce Department said, down 7.6% from the year before. The average sales price was USD485,000.
Economists at Barclays explained new home sales are measured at the time of contract signing, so reflect a more current picture of mortgage rates than existing home sales, which are measured at the time of closing.
"As such, this minimal downward move makes sense given the similarity of mortgage rates to the prior month," Barclays commented.
"However, the overall downward momentum in mortgage rates may provide upward momentum to new home sales in future months; additionally, buyer traffic has continued to trend upwards since November, giving stronger signs of increased demand," Barclays suggested.
The pound rose to USD1.2638 late Monday, from USD1.2594 on Friday. The euro traded at USD1.0837, up from USD1.0805 on Friday.
Versus the yen, the greenback was little changed at JPY151.46 compared with JPY151.43.
On Wall Street, Boeing rose 1.3% after it announced that its chief executive officer and chair both intend to step down from their posts this year.
The Arlington, Virginia-based aerospace company said CEO Dave Calhoun will resign at the end of 2024, while Chair Larry Kellner, will not stand for re-election at its next annual shareholder meeting.
Boeing said former Qualcomm CEO Steve Mollenkopf, who has served on the board since 2020, will succeed Kellner as chair and lead the process to select CEO Calhoun's successor.
Boeing also named Chief Operating Officer Stephanie Pope as the new CEO of Boeing Commercial Airplanes, effective immediately, as its current leader Stan Deal retires.
Bank of America said the changes were "positive for investors," noting Boeing is in need of "drastic cultural overall".
"We see the changes as the first right steps of removing the "old guard", and making way for a new team which can work from a less sullied slate," BofA analysts said in a research note.
"The new CEO will be coming into a Boeing which has been playing a reactionary defense for quite some time, however the best leaders are forged in fire. This may be the first real chance, in a long time, Boeing has had to clean-house and reset their own narrative."
Intel fell 1.7% following a Financial Times report that China will phase out microprocessors from the firm and its peer, Advanced Micro Devices, so they cannot be used in government computers and servers under new guidelines.
AMD fell 0.6%.
The stricter new regulations also aim to sideline Microsoft's Windows operating system, in a shift towards domestic options, the report said.
Microsoft retreated 1.4%.
The new guidelines by the Ministry of Industry & Information Technology orders government agencies and party organs to include criteria requiring "safe and reliable" processors and operating systems when it comes to purchases.
The European Union hit Apple, Google parent Alphabet and Meta Platforms with the first ever probes under a mammoth digital law, which could lead to big fines against the US technology companies.
The European Commission, the EU's antitrust regulator, announced that it "suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA" – the bloc's Digital Markets Act.
Since March 7, six of the world's biggest tech companies – Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta and Microsoft – have had to comply with the EU's landmark DMA after being named so-called "gatekeepers".
Shares in Apple fell 0.8%, Amazon rose 0.5% and Meta declined 1.3%.
In London on Monday, the FTSE 100 closed down 0.2%. Frankfurt's DAX 40 closed up 0.3% while the CAC 40 in Paris ended marginally lower.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 1.2%. In China, the Shanghai Composite fell 0.7%, while the Hang Seng index in Hong Kong lost 0.2%. The S&P/ASX 200 in Sydney closed up 0.5%.
Brent oil rose to USD86.77 a barrel on Monday from USD85.48 on Friday. West Texas Intermediate climbed to USD81.91 a barrel from USD80.87.
The price of gold firmed to USD2,170.94 an ounce on Monday, compared to USD2,181.60 on Friday.
Tuesday's global economic calendar sees US durable goods orders figures at 1230 GMT and a US consumer confidence reading at 1500 GMT.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News