Mindful of the wild swings of recent days, stocks continued to be restive on Wednesday, although a measure of stability returned in late afternoon trading as the Dow and S&P added gains as bargain hunting reigned, before slipping into the red at close.
The Dow Jones Index fell -0.08% to close at 25,102.73 while the S&P 500 settled lower -0.50% at 2,681,66. Tech-heavy Nasdaq finished with a drop of -0.90%. Triggers remain inflation and rising bond yields which are seen as potentially deleterious to corporate earnings as a result of higher borrowing costs. The 10-Year Treasury rose to 2.85%.
Much of market commentary, with an eye towards increased volatility in the near future, still deemed this week’s rollicking action as less a turning point in the market. Most experts seem certain that performance was not reflective of underlying fundamentals and are not worried including Treasury Secretary Steve Mnuchin who cited policies such as tax reform as positive for long-term growth at a House Financial Services Committee hearing. However, this week's fractious start does raise the spectre that investors’ views about the ease of the long-running bull run is more the end is nigh if the Federal Reserve hikes rates much faster than expected.
- Dow 24,893.28 –0.08%
- S&P 500 2,681.66 -0.50%
- Nasdaq 7,051.98 -0.90%
- Russell 2000 1,508.03 +0.06%
- NYSE Composite 12,687.24 -0.46%
- Gold 1,317.4 -0.92%
- Oil WTI $61.74 -2.60%
Among the risers were Snap +47.58%, Twitter rose +6.62%. Insurance company, XL Group, jumped +12.48% and Hasbro rose +8.83%. Chipotle fell in spite of its profits beat down -10.55% and Microchip Technology dropped -9.80%.
Trump bemoans new era where good news is bad
President Trump's silence on the dramatic drop in the stock market on Monday was deafening by its absence. Today via Twitter he broke his reticence and provided profound thought and a warning to spooked investors.
In the “old days,” when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!— Donald J. Trump (@realDonaldTrump) February 7, 2018
And the consensus is that Trump is sort of right in his assessment. Bloomberg highlights that though the maxim was correct in the past a new pattern has emerged to fit the less than usual circumstances of the bull market. As reported on Bloomberg: "Why? Because unlike recent years, when the economic expansion was tepid and in its early stages, growth is running so hot now that investors fear that signs of even more strength will prompt the Federal Reserve to speed up the pace of interest-rate increases."
CNNMoney takes a quick look betwixt positive news for Main St that contrarily doesn't elicit a feel-good response on Wall St.
The New York Times advises Trump to follow Presidents past who scrupulously avoided tying themselves to short-term stock market gyrations "because if you live by the Dow, you may die by the Dow."