Markets wrap: Stocks drop as economic data outweigh Fed remarks
Stocks retreated as inflationary signals from the latest economic reports overshadowed dovish reassurances from several Federal Reserve officials. Treasuries climbed.
The S&P 500 fluctuated throughout most of the trading session after a gauge of new U.S. home sales slid by more than forecast as higher prices restrained demand. Separate figures showed that consumer confidence slipped for the first time this year, with inflation concern and elevated unemployment likely curbing improvement in sentiment. Meanwhile, Fed Vice Chair Richard Clarida said price pressures would "prove to be largely transitory."
His remarks echoed those of Chicago Fed President Charles Evans, the central bank's Vice Chair for Supervision Randal Quarles and three other Fed officials who this week played down the risk that higher inflation would persist. Still, investors have been concerned about how long the central bank can keep stimulative monetary policy in place if economic data continue to show price pressures.
"The data remains 'volatility,' and that should be expected as we deal with the pandemic exit and the uncertainties that surround that," said Dennis DeBusschere, head of portfolio strategy at Evercore ISI.
Some corporate highlights:
- Amazon.com Inc. was sued by the attorney general for Washington, D.C., who accused it of engaging in anticompetitive practices that have raised prices for consumers.
- Moderna Inc. rallied as its coronavirus vaccine was found highly effective in 12 to 17 year-old adolescents in a large study, paving the way for regulatory submissions around the world by early June.
Here are some events this week:
- Reserve Bank of New Zealand policy decision Wednesday, Bank of Korea rate decision Thursday.
- CEOs of the largest U.S. banks, including JPMorgan and Goldman Sachs, will testify before lawmakers in the Senate Banking and House Financial Services committees Wednesday.
- U.S. initial jobless claims, GDP, durable goods, pending home sales on Thursday.
These are some of the main moves in markets:
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- The S&P 500 fell 0.2% as of 4 p.m. New York time
- The Nasdaq 100 rose 0.1%
- The Dow Jones industrial average fell 0.2%
- The MSCI World index rose 0.2%
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- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.2% to $1.2246
- The British pound was little changed at $1.4144
- The Japanese yen was unchanged at 108.75 per dollar
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- The yield on 10-year Treasuries declined five basis points to 1.56%
- Germany's 10-year yield declined three basis points to -0.17%
- Britain's 10-year yield declined two basis points to 0.79%
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- West Texas Intermediate crude fell 0.3% to $66 a barrel
- Gold futures rose 0.9% to $1,903 an ounce