Stock Market News for March 18, 2015 – Zacks Investment Research

Benchmarks finished mostly lower on Tuesday as investors grew jittery ahead of FOMC’s statement regarding rate hike. Investors are looking for clues as to when the Federal Reserve will start hiking rates. The Federal Open Market Committee meeting kicked off on Tuesday. Fed officials are expected to begin the rate hike process by dropping the “patient” phrase. While the S&P 500 and the Dow ended in the red, the Nasdaq defied the trend banking on Apple’s gains.

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The Dow Jones Industrial Average (DJI) declined 0.7% to close at 17,849.08. The Standard & Poor’s 500 (S&P 500) lost 0.3% to 2,074.28. The tech-laden Nasdaq Composite Index closed at 4,937.43; increasing almost 0.2%. The fear-gauge CBOE Volatility Index (VIX) gained 0.3% to settle at 15.66. A total of about 6.1 billion shares were traded on the US exchanges on Tuesday, below the month to date average of 6.6 billion. Decliners outpaced advancing stocks on the NYSE. For 51% stocks that declined, 46% advanced.

Benchmarks mostly ended in the red as investors eagerly waited for the Fed’s statement on the timing of interest rate hike following its ongoing two-day policy meeting that ends on Wednesday. Investors are anxiously looking forward to whether or not the Fed starts the rate hike process by dropping the “patient” phrase from its guidance.

Meanwhile, Tuesday’s weak data on housing starts raised questions whether the Fed will be in a hurry to raise federal funds rate. The U.S. Department of Commerce reported that privately-owned housing starts plunged 17% to 897,000 in February from January’s revised tally of 1,081,000. This was also way behind the consensus estimate of 1,042,000. Single-family housing starts nosedived 14.9% in February to 593,000 from January’s revised figure of 697,000.

Heavy snowfall in the Northeast and Midwest regions was cited to be the reason behind the sharp drop in housing starts. While new construction in the Northeast tanked 56%, housing starts in Midwest region tumbled 37%. Separately, building permits increased at a rate of 0.3% in February to 1,092,000, in contrast to the consensus estimate of a decrease to 1,043,000.

Nine out of 10 sectors of the S&P 500 ended in the red. The Materials Select Sector SPDR ETF (XLB) declined 1.1%, the highest among the S&P 500 sectors. Key stocks from the sector including E. I. du Pont de Nemours and Company (DD – Analyst Report), Monsanto Company (MON – Analyst Report), The Dow Chemical Company (DOW – Analyst Report), Praxair Inc. (PX – Analyst Report) and LyondellBasell Industries N.V. (LYB – Analyst Report) decreased 3.1%, 0.9%, 0.9%, 1.1% and 3,1%, respectively.

The Consumer Staples Select Sector SPDR (XLP) declined 0.7%. The sector was the second biggest loser among the S&P 500 sectors. Top holdings from the sector such as The Procter & Gamble Company (PG – Analyst Report), Wal-Mart Stores Inc. (WMT – Analyst Report) and CVS Health Corporation (CVS – Analyst Report) decreased 0.9%, 0.8% and 1.3%, respectively.

Meanwhile, oil prices dropped again on Tuesday on concerns over significant increase in supplies in both the U.S and Libya. The price of WTI crude oil fell almost 1% to $43.46 a barrel, its lowest level since Mar 2009. Additionally, price of Brent crude oil dropped a meager 0.02% to $53.43 a barrel. Drop in oil prices had a negative impact on the Energy Select Sector SPDR (XLE), which declined 0.4%.

The technology sector bucked the downtrend and ended in the green, boosted by shares of Apple Inc. (AAPL – Analyst Report) gaining 1.7%. The tech-behemoth is in talks with programmers to launch a slimmed-down bundle of TV networks. The Technology Select Sector SPDR ETF (XLK) gained a meager 0.02%.

Apple’s gains also helped the Nasdaq settle in positive territory. Gains among bio-tech stocks too boosted the Nasdaq. Bio-tech stocks including Biogen Idec Inc. (BIIB – Analyst Report), Celgene Corporation (CELG – Analyst Report), Vertex Pharmaceuticals Incorporated (VRTX – Analyst Report) and Regeneron Pharmaceuticals, Inc. (REGN) increased 1.1%, 0.2%, 1.1% and 3.6%, respectively. Overall, the iShares NASDAQ Biotechnology Index (ETF) gained 0.6%.

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Stock Market News for March 18, 2015 – Zacks Investment Research