A multibillion-dollar order of S&P 500 (INDEXSP:.INX) puts shook the market in the afternoon, knocking off about 0.5% from the benchmark index. It ended up finishing down 0.70% as sellers appeared at the end of the session. Industrial- and material-sector stocks struggled today. A recent leader, bank stocks, lost 0.89% today.
Momentum and cyclical stocks took a beating today as investors continued to shed risk. We saw substantial weakness in small caps, financials, housing, biotechnology, and social media. There were only a few bright spots today, most notably non-biotech pharmaceutical stocks such as Merck (NYSE:MRK) and Pfizer (NYSE:PFE) and select emerging markets such as China and Russia.
The Treasury sold $35 billion of five-year notes today at a high yield of 1.716% that was met with large demand from domestic buyers. Primary dealers received the smallest percentage of the auction on record, according to Bloomberg.
Durable goods orders rose 2.2% in February, ahead of the 0.8% expected. The sizable jump was largely due to an increase in commercial and aircraft orders. The more closely followed component that removes transportation orders rose 0.3% against 0.2% expected. Negatively, the core capital goods orders fell -1.3% in the month, significantly worse than the +0.5% that had been expected.
Tomorrow's Financial Outlook
Tomorrow morning the final release of US fourth-quarter GDP is scheduled. Economists are expecting the quarterly annualized growth to 2.7% from the prior release of 2.4% due to a sharp contraction in the US capital account balance for the quarter, which was released last week. Also scheduled to be reported are last week's jobless claims and February pending home sales.
China will report industrial profits for the first two months of the year tomorrow. It was reported earlier this month that industrial production had grown 8.6% in China through February. The other report due to be released overnight is UK retail sales.
The only notable earnings reports scheduled for tomorrow are GameStop (NYSE:GME) and Conn's (NASDAQ:CONN).
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