Market Overview

Market Wrap for Wednesday, March 6: Stocks Close Mixed as Euro Tests Key Support Level Ahead of ECB Meeting

The U.S. stock market closed mixed on Wednesday, with the Dow extending gains into record territory while the Nasdaq retreated slightly.

The S&P 500 was up a little more than 1 point on the session. Investors reacted to strong economic data which showed that more jobs were added than expected in February.

A factory order report also showed the manufacturing sector holding steady despite a headline number which showed a decline in factory orders for the month of January due primarily to a plunge in aircraft orders.

While risk appetite was strong in some assets, the market was held back by a falling euro ahead of an ECB meeting tomorrow. Market participants are preparing for the possibility that European central bankers will signal future interest-rate cuts at the Thursday policy meeting.

Major Averages

The Dow Jones Industrial Average rose around 43 points, or 0.30 percent, to 14,296.

The S&P 500 added almost 2 points, or 0.11 percent, to 1,541.

The Nasdaq Composite fell around 2 points, or 0.05 percent, to close at 3,222.

ADP Employment Change

The ADP employment figures released on Wednesday showed that the economy added 198,000 jobs in February versus a 215,000 job gain in January. This easily beat consensus estimates which called for the economy to add 150,000 jobs in the month.

Factory Orders

Factory orders fell 2.0 percent in January after increasing 1.3 percent in December. This was slightly better than the consensus which estimated that factory orders fell 2.2 percent in the month. The decline for the month was due to a 45.7 percent plunge in aircraft orders. Overall, ex-transportation, the factory goods report was solid.

Commodities

Crude oil was slightly lower on Wednesday. Late in the equity trading session, NYMEX crude futures were trading down around 0.41 percent to $90.45. Brent crude contracts had lost around 0.50 percent to $111.07. Natural gas also fell on the day and was last trading down around 1.47 percent to $3.48.

Precious metals rose on Wednesday, but remain in a downtrend. At last check, COMEX gold futures had added around 0.39 percent to $1,581 while silver futures were up 1.35 percent to $28.99. Copper futures fell a little less than 0.30 percent on the session.

Grains were hit hard on Wednesday with the largest losses coming in corn and wheat. Corn fell a little less than 3 percent while wheat traded down a little more than 3 percent. Volatility was limited in soft commodities with the biggest mover being cocoa, which lost less than 1 percent.

Bonds

Late in the equity trading session, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was down around 0.80 percent to $117.00. The fall in bond prices drove yields higher on the session.

The yield on the 2-Year Note rose one basis point to 0.25 percent. The yield on the 5-Year Note climbed three basis points to 0.80 percent. Yields on both the 10-Year Note and 30-Year Bond added four basis points to 1.94 percent and 3.15 percent, respectively.

Currencies

The U.S. dollar rose on the day as the EUR/USD pair briefly fell through $1.30. At last check, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.40 percent to $22.49.

The closely watched EUR/USD pair was last down 0.30 percent to $1.3010. The USD/JPY added 0.26 percent and the GBP/USD registered a decline of 0.46 percent.

Volatility and Volume

The VIX closed slightly higher on Wednesday, but market participants continue to expect low volatility going forward. The VIX added 0.59 percent to 13.56 on the session.

Volume was much lower than normal in a quiet trading session on Wednesday. Only around 82 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 134 million.

Stock Movers

Shares of small-cap biotech name Osiris Therapeutics (NASDAQ: OSIR) surged more than 32 percent after the company reported bullish fourth-quarter earnings results.

Grocer The Fresh Market (NASDAQ: TFM) lost around 9 percent late in the day after the company's Q4 earnings report.

AeroVironment (NASDAQ: AVAV) was last trading down around 9 percent after a disappointing Q3 earnings report.

Retailer American Eagle (NYSE: AEO) fell around 11 percent on Wednesday after the company's Q4 results missed analysts' estimates.

Tibco Software (NASDAQ: TIBX) was trading up better than 11 percent heading into the closing bell after analysts at Bank of America Merrill Lynch upgraded the stock to Buy.

Homeowners Choice (NYSE: HCI) jumped more than 19 percent after a strong fourth-quarter where income rose 65 percent, easily beating analysts' estimates.

VeriFone (NYSE: PAY) jumped around 8 percent heading into the close after the company swung to a first-quarter profit. VeriFone had issued a profit warning last month, causing the stock to plunge.

Office supply store Staples (NASDAQ: SPLS) lost almost 9 percent after the company released its Q4 earnings results and cut its full-year guidance.

Sohu.com (NASDAQ: SOHU) lost more than 11 percent after the company refuted a report from Tuesday that it was trying to arrange financing for a go-private transaction. The stock rallied sharply late Tuesday on the report.

J.C. Penney (NYSE: JCP) lost another 3 percent after Vornado Realty Trust (NYSE: VNO) confirmed in a filing that it had sold 10 million J.C. Penney shares to Deutsche Bank.

Posted-In: Earnings News Bonds Broad U.S. Equity ETFs Guidance Rumors Futures Commodities Best of Benzinga

 

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