Stocks Close Firmly Negative After Seeing Initial Strength - U.S. Commentary
3/13/2018 4:15 PM
After failing to sustain an initial move to the upside, stocks moved lower over the course of the trading session on Tuesday. The major averages all slid into negative territory, with the tech-heavy Nasdaq pulling back off a record high.
The major averages ended the day firmly in negative territory. The Dow slid 171.58 points or 0.7 percent to 25,007.03, the Nasdaq tumbled 77.31 points or 1 percent to 7,511.01 and the S&P 500 dropped 17.71 points or 0.6 percent to 2,765.31.
The weakness on Wall Street came amid renewed geo-political concerns after President Donald Trump fired Secretary of State Rex Tillerson.
"Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service!" Trump tweeted.
The tweet from Trump came shortly after a report from the Washington Post indicated the president's intention to oust Tillerson.
A statement from Under Secretary of State for Public Diplomacy and Public Affairs Steve Goldstein suggested that Tillerson was blindsided by the news.
Traders largely shrugged off a report from the Labor Department showing a modest increase in consumer prices in the month of February.
The Labor Department said its consumer price index rose by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected consumer prices to rise by 0.2 percent.
Core consumer prices, which exclude food and energy prices, also edged up by 0.2 percent in February following a 0.3 percent increase in January. The uptick in core prices also matched expectations.
Telecom stocks showed a significant move to the downside on the day, dragging the NYSE Arca Telecom Index down by 2.7 percent.
Within the telecom sector, Qualcomm (QCOM) posted a notable loss after Trump blocked Broadcom's (AVGO) takeover of the company due to national security concerns.
Considerable weakness was also visible among oil service stocks, as reflected by the 1.3 percent drop by the Philadelphia Oil Service Index.
The weakness among oil service stocks came amid a decrease by the price of crude oil, with crude for April delivery falling $0.65 to $60.71 a barrel.
Financial and steel stocks also moved to the downside on the day, while some strength was visible among housing stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while China's Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index slumped by 1.6 percent, the U.K.'s FTSE 100 Index tumbled 1.1 percent and the French CAC 40 Index dropped by 0.6 percent.
In the bond market, treasuries moved moderately higher after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.848 percent.
Trading on Wednesday may be impacted by reports on producer prices, retail sales and business inventories.
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