Weakness in healthcare, industrial and energy shares dragged benchmarks significantly lower on Tuesday. The energy sector took a beating after oil prices dropped. Yesterday’s decline pulled the Dow into the red for the quarter, while S&P 500 managed meager gains.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) declined 1.1%, or 200.19 points, to close at 17,776.12. The Standard & Poor’s 500 (S&P 500) decreased 0.9% to 2,067.89. The tech-laden Nasdaq Composite Index closed at 4,900.88; losing 0.9%. The fear-gauge CBOE Volatility Index (VIX) gained 5.4% to settle at 15.29. A total of about 6.3 billion shares were traded on Tuesday, lower than the month-to-date average of 6.7 billion. Decliners outpaced advancing stocks on the NYSE. For 57% stocks that declined, 40% advanced.
Benchmarks finished the last trading session of the first quarter in the red with nine out of 10 S&P 500 sectors ending in negative territory. The Health Care Select Sector SPDR (XLV) declined 1.7%, the highest among the S&P 500 sectors. Bio-tech stocks contributed to the sector’s underperformance. Biogen Idec Inc. (BIIB), Celgene Corporation (CELG), Vertex Pharmaceuticals Incorporated (VRTX) and Regeneron Pharmaceuticals, Inc. (REGN) decreased 2.2%, 3.9%, 2.7% and 1.8%, respectively.
Separately, the Industrial Select Sector SPDR (XLI) declined almost 1% as large cap firms including The Boeing Company (BA) and General Electric Company (GE) lost 1.7% and 1.2%, respectively.
Meanwhile, as talks on Iranian nuclear deal neared its deadline, oil prices dropped. Worries about abundant supply of oil also continued to pressure oil prices. WTI crude and Brent crude declined 2.3% and 2.1% to $47.60 per barrel and $55.11 a barrel, respectively. Dow components Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) decreased 0.7% and 1.8%, respectively.
Economic data was mixed on Tuesday. While, consumer confidence figure was better than expected, Chicago PMI numbers turned out to be weaker than anticipated. The Conference Board reported that the Consumer Confidence Index rose to 101.3 in March from 98.8 in February. The number was higher than the consensus estimate of 97.2.
The Supply Management-Chicago noted that Chicago Business Barometer went up to 46.3 in March from February’s reading of 45.8. However, this rise in the Chicago Purchasing Managers Index in March was less than the consensus estimate of an increase to 51.8.
Separately, the S&P/Case Shiller composite index of 20 metropolitan cities rose 4.6% year on year in January, higher than 4.4% gain in December.
For the month, the S&P 500, the Dow and the Nasdaq declined 1.7%, 2% and 1.3%, respectively. Benchmarks ended in the red for the month as investors remained concerned about multinationals’ first quarter earnings results due to overall strength in the U.S. dollar. Additionally, crisis in the Middle-East following an air strike in Yemen dampened investor sentiment.
A flurry of dismal economic data including Philadelphia Federal Reserve’s manufacturing index, Empire State Manufacturing Survey Index, ISM Manufacturing Index, durable orders, factory orders, housing starts, construction spending and personal consumption expenditure also dented investor sentiment.
However, fears among investors of a sooner-than-expected rate hike subsided following an unexpectedly dovish stance by the Federal Reserve. Among the other positives, markets were aided by the European Central Bank’s announcement of bond-buying program and interest cuts in China.
For the quarter, markets witnessed choppy trading sessions as investors grappled with concerns related to reduced global growth projections, slump in oil prices, strengthening dollar and apprehensions about the timing of the rate hike. Further, World Bank reduced its global economic growth outlook for 2015 and 2016.
The Dow snapped a three-quarter winning streak and declined 0.3%. The blue-chip index dropped at least 1% for nine days during the quarter, the most number of days to end in the red since second quarter 2012.
However, the S&P 500 gained 0.4% and extended its quarterly winning streak to nine quarters. This is its longest stretch of quarterly gains since 1998. The Nasdaq advanced 3.5%, also extending its winning streak to nine quarters, its longest stretch of quarterly gains ever.
Deal news between Pfizer Inc. (PFE) and Hospira Inc. (HSP), and Staples, Inc. (SPLS) and Office Depot, Inc. (ODP) had a positive impact on investor sentiment. Moreover, encouraging earnings results from Cisco Systems, Inc. (CSCO), Pepsico, Inc. (PEP), The Coca-Cola Company (KO), The Walt Disney Company (DIS) and General Motors Company (GM) added to the bullish sentiment.
However, disappointing earnings results by banking behemoths including JPMorgan Chase & Co. (JPM), Bank of America Corporation (BAC), Citigroup Inc. (C) and Morgan Stanley (MS) had a negative impact on investor sentiment.
Meanwhile, investors assessed the consequences markets may face after Swiss National Bank dropped its long-standing exchange rate of the Swiss franc against the euro. However, an agreement on Greece’s bailout program had improved investor sentiment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
CELGENE CORP (CELG): Free Stock Analysis Report
VERTEX PHARM (VRTX): Free Stock Analysis Report
REGENERON PHARM (REGN): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
HOSPIRA INC (HSP): Free Stock Analysis Report
STAPLES INC (SPLS): Free Stock Analysis Report
OFFICE DEPOT (ODP): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
To read this article on Zacks.com click here.