Thursday March 25th

25-03-2021

S&P 500 falls for a third straight day amid more weakness in tech shares, Powell comments

U.S. stock index futures fell on Thursday as the market continued to struggle in recent weeks, especially high-growth technology names. The Dow Jones Industrial Average slid 220 points, while the S&P 500 dipped 0.5%, falling for a third straight day. The Nasdaq Composite declined 0.8%. Microsoft, Netflix and Tesla all traded in negative territory. “The weakness in technology stocks is undeniable, but it likely won’t be a straight line down for the sector and there will be zigs and zags along the way,” said David Bahnsen, chief investment officer at The Bahnsen Group. “Tech stock valuations are too high and are screaming for a correction.”Oil prices fell about 3% Thursday as demand concerns rekindled with fresh coronavirus pandemic lockdowns. The S&P 500 energy sector slid more than 2%. The market sell-off came as Federal Reserve Chairman Jerome Powell hinted at one day starting to remove the stimulus that has boosted the market during the pandemic. “As we make substantial further progress toward our goals, we’ll gradually roll back the amount of Treasurys and mortgage-backed securities we’ve bought,” Powell told NPR’s “Morning Edition.” “We will very gradually over time and with great transparency, when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times.” Investors pored over a better-than-expected reading on weekly jobless claims. The Labor Department said first-time claims for unemployment insurance totaled 684,000 for the week ended March 20, lower than an estimate of 735,000 from economists surveyed by Dow Jones. Pressure on equities came even as bond yields continued to decline from recent highs. The 10-year Treasury yield dipped 2 basis points to below 1.6%, falling for a fourth day after the rate hit a 14-month high last week. The three major averages are all on track to post a losing week, with the S&P 500 and the Dow falling 1% each. The Nasdaq has fallen more than 2% this week. The S&P 500 and the blue-chip Dow hit their record highs last week. Shares in major Asia-Pacific markets were mixed on Thursday, though tech stocks in the region took a hit following a sell-off in the sector overnight on Wall Street. In Japan, the Nikkei 225 rose 1.14% to close at 28,729.88 while the Topix index gained 1.4% to finish its trading day at 1,955.55. South Korea’s Kospi closed 0.4% higher at 3,008.33. Mainland Chinese stocks were mixed on the day, with the Shanghai composite slipping 0.1% to 3,363.59 while the Shenzhen component advanced 0.103% to 13,421.16. Hong Kong’s Hang Seng index closed fractionally lower at 27,899.61. Oil prices skidded more than 1% as fuel demand concerns re-emerged alongside fresh coronavirus pandemic lockdowns, trimming overnight gains spurred by the grounding of a giant container ship blocking crude shipments through the Suez Canal. Brent crude futures slid 89 cents, or 1.4%, to trade at $63.52 per barrel, after jumping 6% overnight. U.S. West Texas Intermediate (WTI) crude futures dropped by 87 cents, or 1.4%, to trade at $63.54 per barrel, after climbing 5.9% overnight. Gold prices eased on Thursday as a stronger U.S. dollar overshadowed support from lower bond yields and worries that lockdowns across Europe would take a toll on the pace of economic recovery. The dollar index rose to a four-month high against its rivals, making gold more expensive for holders of other currencies. “We are in a rough patch in terms of risk appetite in general; that could add some support to gold market, but right now the focus is on the dollar,” said Saxo Bank analyst Ole Hansen. “Gold prices need to break above $1,765/oz level to attract renewed momentum.” Spot gold was down 0.3% at $1,728.58 per ounce. U.S. gold futures were down 0.3% at $1,728.30 per ounce.