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The Markets Now: Consumer Pessimism Pulls S&P 500 Away From Record High


Plus, JPMorgan remains lower during Senate hearing.

Stocks have remained lower today after consumer sentiment declined more than expected in March. The S&P 500 (INDEXSP:.INX) dropped 0.13% to 1,561.26, falling away from its record high of 1,565.15. The Dow (INDEXDJX:.DJI) decreased 0.27% to 14,499.37, and the Nasdaq (INDEXNASDAQ:.IXIC) fell 0.16% to 3,253.64. The University of Michigan Survey Center and Reuters reported that the consumer sentiment index dropped to 71.8 from 77.6 in February. The expectations component weighed on the index and likely fell to 61.7 because of the budget battles in Washington.

The Bureau of Labor Statistics reported that the consumer price index, or CPI, increased 0.7% in February after no change occurred in January. The median forecast anticipated a 0.5% gain. The core-CPI, which excludes food and energy costs, increased 0.2% compared to 0.3% in January. The energy index spiked 5.4% last month as the gasoline index surged 9.1%. The indices for shelter, used cars and trucks, recreation, and medical care increased last month while the indices for new vehicles, apparel, airline fares, and tobacco decreased. Year-over-year, CPI inflation increased 2.0% in February.

The Federal Reserve Bank of New York reported that the Empire State Index remains positive for a second month at 9.24 in March. February showed a reading of 10.04. A reading above 0 indicates improving business conditions in manufacturing based on a survey of approximately 175 manufacturing executives. The index had remained negative from July through January.

The Federal Reserve reported the industrial production index increased 0.7% in February after remaining flat in January. The manufacturing component rose 0.8% versus analysts expectations of 0.3%. Utilities increased output by 1.6% and mining production decreased by 0.3%. Capacity utilization for total industry also climbed from 79.2% to 79.6%. The index measures the real output of industry as a percentage of the real output of a base year, currently 2007.

Foreign investors slowed their purchases of US securities in January to a net $25.7 billion. They had bought $64.2 billion and $57 billion in December and November respectively.

Bank of America (NYSE:BAC) spiked 3.84% to $12.58 after the Federal Reserve accepted its $5 billion stock buyback program. The bank will also redeem approximately $5.5 billion in preferred stock.

Wells Fargo (NYSE:WFC) received approval from the Fed to increase its dividend 20% to $0.30 in the second quarter from $0.25. Shares of the bank jumped 2.81% to $38.01.

CenterPoint Energy (NYSE:CNP) will enter into a $10.7 billion master limited partnership with a jointly owned subsidiary of OGE Energy Corporation (NYSE:OGE) and ArcLight Capital Partners. Investors welcomed the news, sending shares up 7.17% to $23.41.

JPMorgan (NYSE:JPM) shares slid 1.76% to $50.10. The Senate released a 300-page report today exposing that the bank ignored internal risk controls and CEO Jamie Dimon briefly withheld some information from regulators. Current and former JPMorgan executives, such as Ina Drew, are testifying in a Senate hearing, which started at 9:30 a.m. EDT.

Yahoo (NASDAQ:YHOO) fell 1.90% to $22.

Twitter: @ChrisWitrak
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