Wall Street closes lower after short-lived optimism

Reuters Interview 3/30/22
March 31, 2022
CNBC Interview 3/30/22
March 31, 2022

Wall Street closes lower after short-lived optimism

The New York Stock Exchange widened its losses late Wednesday, especially the technology sector, after profit-taking and short-lived optimism on Ukraine, while oil prices rebounded .

According to final results at the close, the Dow Jones index closed down 0.19% to 35,228.81 points. The Nasdaq, with strong technological coloring, dropped 1.21% to 14,442.27 points. The S&P 500 lost 0.63% to 4,602.45 points.

Oil prices resumed their march forward, closing up almost 3% as the market again doubted an imminent diplomatic solution in Ukraine, and worried about the lack of global supply.

The energy sector was one of the few in positive territory on the stock market (+1.17%), following the surge in black gold prices.

The New York Stock Exchange widened its losses late Wednesday, especially the technology sector, after profit-taking and short-lived optimism on Ukraine, while oil prices rebounded .

According to final results at the close, the Dow Jones index closed down 0.19% to 35,228.81 points. The Nasdaq, with strong technological coloring, dropped 1.21% to 14,442.27 points. The S&P 500 lost 0.63% to 4,602.45 points.

Oil prices resumed their march forward, closing up almost 3% as the market again doubted an imminent diplomatic solution in Ukraine, and worried about the lack of global supply.

The energy sector was one of the few in positive territory on the stock market (+1.17%), following the surge in black gold prices.

“The market took a breather. I think it’s profit taking after the rise the day before,” said Peter Cardillo of Spartan Capital.

Same story at Wells Fargo where we observed the “pause” of the market following the “rally” the day before, while positive talks between Russia and Ukraine had relieved investors.

“The geopolitical turn of events has weighed on risk appetite as the United States and its allies are skeptical of Russia’s commitment to reduce military activity near Kyiv, as reported,” revealed in a note, Wells Fargo analysts.

“Furthermore, Moscow did not report any breakthrough in the latest round of ceasefire talks,” they added.

Appearing to go back on announcements made after talks between belligerents on Tuesday in Istanbul, Russian presidential spokesman Dmitry Peskov said on Wednesday that he could not “report anything very promising or a breakthrough any”.

“Regarding the situation in Ukraine, I don’t think Russia is really ready for peace talks and the progress mentioned during the peace talks was not really constructive,” Cardillo said.

On the bond front, yields on US Treasuries eased. But the rates on two-year bills remain very close to those on 10-year bills, at 2.31% and 2.34% respectively.

If shorter rates were to settle above longer rates, it could be a harbinger of a recession, some analysts fear.

“The recent surge in Treasury yields”, which corresponds to a fall in the price of bonds from abandonment in favor of equities, “remains in the center of concern, as inversions of the yield curve are closely watched”, Schwab warned.

The US government released the latest estimate of US GDP growth in the 4th quarter, revised slightly down to 6.9% year on year.

“Looking forward, we can expect slower growth in the first quarter, dampened in inventories and exports,” warned Rubeela Farroqi, economist for HFE.

“We see downside risks from geopolitical events and lockdowns in China,” she added.

On the positive side, the private sector in the United States added 455,000 jobs in March, slightly more than expected, and the February figure was revised up to 486,000.

The March unemployment rate will be released on Friday. It should continue to back up a bit. It is expected at 3.7% (-0.1 point).

Listed yoga and sportswear maker Lululemon climbed 9.58% to $376.92, after quarterly profit beat expectations despite disappointing sales. But the company has announced good prospects for 2022 and a billion-dollar share buyback program.

Despite honorable results from Micron Technology (-3.52%), the other major microprocessor manufacturers lost ground, such as AMD (-3.25%) and Nvidia (-3.37%).

Pet food seller Chewy plunged 16.12% to $42.78 after posting its third straight quarterly loss. The group explains that it is facing “strong demand in a difficult environment” and mentions failed sales due to a lack of inventory.