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Stocks Crater, Biotech Leads the Way Down


Today's financial recap and tomorrow's financial outlook.

Stocks gave up Tuesday's gains despite solid economic data and yet more M&A activity.

The S&P 500 fell 0.9% to 2067.89 as the market sliced through the widely-watched 50 day moving average in the last hour of trading.

Biotech led to the downside as traders continue to take profit in the sector, which at one point, was up over 20% year-to-date. The NASDAQ Biotechnology Index ETF (IBB) fell 2.2%.

March Consumer Confidence came in at 101.3, which was well ahead of the 96.4 consensus.

The ISM Milwaukee Index was 53.25 in, edging out the 52.5 expected by economists.

The S&P-Case Shiller home price report was also above expectations.

On the downside, the March Chicago Purchasing Managers Index missed by a wide margin at 46.3.

Deal activity was heavy for the second straight day. Cable operator Charter Communications (CHTR) announced it is buying Bright House Networks for $10.4 billion, while Endurance Specialty Holdings (ENH) is acquiring Montpelier Re (MRH) for $1.8 billion. Also, CBRE Group (CBG) said it is purchasing a unit of Johnson Controls (JCI) for $1.5 billion.

Oil came under pressure again today as traders continue to anticipate a deal with Iran which would boost its crude oil exports. Oil prices have already been under tremendous pressure from fears of a growing supply glut.

Additionally, the US dollar turned up intraday, turning up the pressure on commodities.

However, gold was resilient, falling just 0.1%.

European economic data was solid, in keeping with the recent trend. Euro-Zone CPI was -0.1% in March, in-line with estimates and an improvement from February's -0.3%. German unemployment fell to 6.4%, which was ahead of the 6.5% consensus.

Greece once again flared up as a source of tension as it failed to come to an agreement on reforms with lenders. Earlier in the day, Greece hinted at making some sort of deal with Russia, which would violate UN policy.

Tomorrow's Financial Outlook

April Fool's Day will be chock full of economic data, including MBA Mortgage Applications, ADP Employment, Markit PMI, Construction Spending, ISM Manufacturing, and Auto Sales numbers.

Traders will especially be focused on the ADP number as a possible clue for the big March NFP report, which will be released on Friday.

While job numbers have always been important, traders may focus on them more than ever. This morning, Federal Reserve Vice Chairman Stanley Fischer said that US employment data may paint a more accurate picture of the economy than GDP. That could imply a small shift in perception of how the Fed makes monetary policy decisions in reaction to economic data.

Recent GDP numbers have been mediocre, while the monthly jobs numbers have been fairly solid.

Twitter: @T3Live
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