Wall St ends down after PPI data and as chipmakers fall

It was a shot straight down all day long when the PPI numbers did not come through as desired with the Dow reaching a low of a minus 340 by 3:30 and then bouncing back to recover over half of those losses in the final half hour. The same happened in the other indexes, hitting a low at around 3:30, then bouncing back dramatically in the final half hour.  

Though there’s no explanation for this 11^th hour comeback, it’s clear that investors are nervous about two months of hotter inflation combined with a weaker retail sales report and are thus taking profits after all the recent sharp gains. But regardless that Fed policy may not be as loose as desired, “further tightening still remains a low probability.” The odds of a June rate cut have now fallen to 62.9% down from 65% yesterday and 81.7% last week. For once, volume too is rebounding and was above average at 13.1 billion. 

Wall St ends down after PPI data and as chipmakers fall

By Caroline Valetkevitch

Thu March 14, 2024 6:02 PM

DJ: 39,043.32  +37.83       NAS: 16,177.77  -87.87         S&P: 5,165.31  -9.96     3/13

DJ: 38,905.66  -137.66      NAS: 16,128.53  -49-24         S&P: 5,150.48  -14.83   3/14

NEW YORK, March 14 (Reuters) - U.S. stocks dropped on Thursday, with chipmaker stocks extending losses for a second day, and as a jump in producer prices left investors wondering if the Federal Reserve might wait longer than expected to cut interest rates.  Data showed U.S. producer prices increased more than expected in February as the cost of goods like gasoline and food surged.  Rate-sensitive utilities (.SPLRCU), opens new tab and real estate (.SPLRCR), opens new tab were the day's weakest sectors, with real estate down 1.6% and utilities off 0.8%.  The Fed is expected to leave rates unchanged at its policy meeting next week. The market has trimmed the odds of a cut of at least 25 basis points at its June meeting to 62.9%, CME's FedWatch Tool showed, down from 81.7% a week ago.

"If we take inflation as a whole, we've had relatively hot inflation readings the last two months now, yet the market has kind of powered higher," said Tony Welch, chief investment officer of SignatureFD.  "Fed policy may not be as loose as the market wanted it to be this year, but the prospect of further tightening still remains a low probability."  Nvidia (NVDA.O), opens new tab shares fell 3.2%, while an index of semiconductors (.SOX), opens new tab was down 1.8%. The index is down 3.5% for the week so far, with investors taking profits after recent sharp gains.

The Dow Jones Industrial Average (.DJI), opens new tab fell 137.66 points, or 0.35%, to 38,905.66. The S&P 500 (.SPX), opens new tab lost 14.83 points, or 0.29%, at 5,150.48 and the Nasdaq Composite (.IXIC), opens new tab dropped 49.24 points, or 0.3%, to 16,128.53.  The S&P 500 remains up about 8% for the year to date.  The small cap Russell 2000 (.RUT), opens new tab fell 2% on the day, underperforming the broader market.

"There's nervousness about the market being very extended with a relatively narrow breath. You can see the anxiety from the hotter PPI expressed in the Russell index of small and midcap names," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.  Other data showed U.S. retail sales rebounded in February, rising 0.6%, but less than the 0.8% advance expected. 

Shares of Robinhood Markets (HOOD.O), opens new tab rose 5.2% after the trading app operator said its assets under custody rose 16% in February.

Volume on U.S. exchanges was 13.1 billion shares, compared with the 12.1 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancers on the NYSE by a 3.77-to-1 ratio; on Nasdaq, a 3.08-to-1 ratio favored decliners.  The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 57 new highs and 186 new lows.