U.S. Market Indexes Lower with Uncertainty over June Fed Meeting

U.S. market indexes were lower Tuesday with heightened uncertainty over a June rate increase from the Federal Reserve. For the day, the Dow Jones Industrial Average lost -180.73 points or -1.02 percent to close at 17,529.98. The S&P 500 Index was also down at 2,047.21 for a loss of -19.45 points or -0.94 percent. The Nasdaq Composite Index closed at 4,715.73 for a loss of -59.73 points or -1.25 percent.

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Source: DJIA, S&P 500 and Nasdaq Composite. Google Finance.

Tuesday’s Market Movers

Economic data Tuesday showed mixed signs for the economy. Inflation data was higher as reported by the Consumer Price Index. According to the CPI report, prices increased by 0.4 percent which was above the consensus estimate of 0.3 percent. However, while inflation data was higher, production and housing data was robust. Industrial production increased 0.7 percent for the month, above consensus of 0.2 percent. Meanwhile, annualized housing starts were also higher at 1.172 million seasonally adjusted. The day’s reports raised the possibility for a potential rate increase in June by the Federal Reserve and volatility in U.S. stocks is likely to remain high in the weeks ahead.

In the Dow Jones Industrial Average, Home Depot reported earnings on Tuesday while Cisco and Wal-Mart will report later this week. Home Depot reported revenue for the quarter of $22.76 billion, beating analysts’ estimates by $410 million and increasing 9.0 percent from the comparable quarter. Earnings per share for the first quarter were $1.44, beating analysts’ estimates by $0.09. Despite the day’s positive results, the stock was lower by approximately 3 percent, leading losses for the Dow Jones Industrial Average on Tuesday.

In the Dow Jones Industrial Average, stocks gaining included Caterpillar and DuPont. In the broad market, energy sector stocks were mostly higher while utilities and consumer staples led losses.

For the day, technology stocks also traded broadly lower. The Nasdaq Composite Index was down -1.25 percent and the Nasdaq 100 was lower by -1.32 percent. Top gains and losses from the Nasdaq 100 included the following:

Gains

Endo International PLC 6.15 percent

Western Digital 3.33 percent

Vodafone 2.58 percent

Seagate Technology 2.51 percent

Stericycle 2.31 percent

Losses

Cerner -2.28 percent

Comcast -2.52 percent

Microsoft -2.57 percent

Liberty Global -2.63 percent

Biomarin Pharmaceutical -2.68 percent

In commodities, gold traded higher as evidenced by the SPDR Gold Trust which reported a gain of 0.42 points or 0.34 percent. The dollar was lower for the day as the U.S. Dollar Index was down -0.01 points or -0.01 percent to 94.55.

Small-Cap Stocks

In small-caps, the Russell 2000 followed the day’s trend lower closing at 1,097.75 for a loss of -18.46 points or -1.65 percent. The S&P 600 closed at 672.66 for a loss of -11.49 points or -1.68 percent. The Dow Jones Small-Cap Growth TSM Index closed at 6,748.58 for a loss of -83.57 points or -1.22 percent. The Dow Jones Small-Cap Value TSM closed at 8,020.05 for a loss of -113.76 points or -1.40 percent.

Other Notable Indexes

Other notable index closes included the S&P 400 Mid-Cap Index which closed at 1,438.81 for a loss of -15.97 points or -1.10 percent; the Russell 3000 which closed at 1,203.74 for a loss of -11.82 points or -0.97 percent; and the Dow Jones U.S. Select Dividend Index which closed at 581.16 for a loss of -7.28 points or -1.24 percent.

Julie Young

julie@dowfutures.org

Julie Young is a Senior Market Reporter and Analyst

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