U.S. stock indexes stay stuck; bond yields and dollar rise
NEW YORK >> The stock market hasn’t been this boring in years.
The Standard & Poor’s 500 remained at a near standstill Wednesday, the ninth day in a row that it has moved by less than 0.4 percent, up or down. That’s its longest streak of listlessness since the summer of 2013. Other indexes were mixed.
The S&P 500 rose 4 points, or 0.2 percent, to 2,271.89. The Dow Jones industrial average slipped 22.05 points, or 0.1 percent, to 19,804.72. The Nasdaq composite index added 16.93, or 0.3 percent, to 5,555.65. Slightly more stocks rose on the New York Stock Exchange than fell.
Stocks have been in a wait-and-see period in recent weeks following their torrid run since Election Day. The S&P 500 is up 6.2 percent since Donald Trump’s surprise victory of the White House, driven higher by expectations for lower corporate taxes and less regulation. Trump will take the oath of office on Friday, and investors are waiting to see how much of his campaign-trail rhetoric will become government policy.
“It’s natural after such a remarkable run postelection to have a bit of a flat, quiet period as investors wait for some more tangibles,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “We know directionally where Donald Trump wants to go, and with a Republican Congress he’s got a higher probability of success than otherwise, but we don’t have the details.”
One notable area of weakness in the stock market was retail. This past holiday shopping season was weaker than many traditional retailers were expecting, and Target became the latest to cut its forecast for fourth-quarter sales and profits as a result. The discounter said that traffic levels at its stores were disappointing in November and December, and its stock fell $4.09, or 5.8 percent, to $66.85 following its announcement.
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Target had the second-largest loss in the S&P 500, while Dollar Tree and other retailers weren’t far behind.
The biggest loss in the S&P 500 came from specialty biopharmaceutical company Mallinckrodt, which fell $2.89, or 5.8 percent, to $46.53 after it agreed to pay $100 million to end a government investigation. Antitrust regulators and five states said Questcor, a company Mallinckrodt bought in 2014, illegally bought the rights to a drug that would have competed with its Acthar gel. The agencies said that deal gave Questcor a monopoly. Questcor raised the price of Acthar from $40 a vial in 2001 to $34,000.
On the opposite side of the S&P 500 was Fastenal, which jumped $2.81, or 5.8 percent, to $51.06 for the biggest gain in the index. The seller of nuts, bolts and other equipment reported stronger fourth-quarter earnings growth than analysts expected.
Treasury yields rose sharply. The yield on the 10-year Treasury note climbed to 2.42 percent from 2.33 percent late Tuesday. It more than made up its loss from the prior day, and continues the steady march higher that bond yields have been on since Election Day. Expectations of higher inflation, along with faster economic growth, have driven the trend.
Consumer prices last month were 2.1 percent higher than the same time a year earlier, according to a Labor Department report released Wednesday. Economists say the inflation rate is still relatively modest, but it’s a clear acceleration from the very low levels of the last four years.
The “Beige Book,” a survey of conditions by the Federal Reserve released Wednesday afternoon, showed that the U.S. economy grew a bit faster at the end of last year and that pricing pressures “intensified somewhat” since its last report in November.
The Federal Reserve has raised interest rates twice in the last two years, up from their record low of nearly zero. The central bank has said that it plans for a gradual rise in rates. Fed Chair Janet Yellen said in a speech on Wednesday that officials expect to raise rates “a few times a year” through 2019. But a big push higher in inflation could force the Fed’s hand.
The dollar rose against many of its rivals, a day after it sank sharply against the British pound and other currencies. The dollar rose to 113.74 Japanese yen from 112.66 late Tuesday. The British pound fell to $1.2284 from $1.2396, and the euro fell to $1.0664 from $1.0709.
In Asian trading, Japan’s Nikkei 225 index rose 0.4 percent, and South Korea’s Kospi index dipped by 0.1 percent.
In Europe, Germany’s DAX rose 0.5 percent, and the U.K. FTSE 100 rose 0.4 percent, while France’s CAC 40 fell 0.1 percent.
Benchmark U.S. crude oil fell $1.40 to settle at $51.08 a barrel. Brent crude, the international standard, fell $1.55 to close at $53.92. Natural gas fell 11 cents to $3.302 per 1,000 cubic feet, heating oil fell 4 cents to $1.61 a gallon and wholesale gasoline fell 5 cents to $1.55 per gallon.
Gold slipped 80 cents to $1,212.10 per ounce, silver rose 13 cents to $17.27 per ounce and copper fell 9 cents to $2.62 a pound.