By Anora Mahmudova and Sara Sjolin, MarketWatch
Producer prices fall in February; Consumer sentiment slides in
March
NEW YORK (MarketWatch)--U.S. stocks suffered another bout of
selling on Friday and the main indexes registered losses for a
third straight week.
The turbulent week was dominated by wild swings in currencies,
with the dollar surging to multiyear highs against the euro as
expectations rose for a rate hike by the middle of the year.
Oil prices fell nearly 10% over the week as the commodity had
been hit hard due to a stronger dollar, reports of a supply glut
and heightened output. Weaker-than-expected economic data added to
the dour Wall Street mood.
The S&P 500 (SPX) closed 12.55 points or 0.6%, lower at
2,053 and lost 0.9% over the week. Energy sector stock led the
decliners over the week, falling 2.8%.
The Dow Jones Industrial Average (DJI) dropped 145.91 points, or
0.8%, to 17,749.31 and recorded a 0.6% loss over the week.
The Nasdaq Composite (RIXF) ended the day down 21.53 points, or
0.4%, at 4,871.76 and lost 1.1% over the week.
Investors grappled with mixed economic reports over the week.
Friday's producer prices report showed a surprise drop. Meanwhile,
consumer sentiment slid in March, falling more than experts had
forecast. Those less-than-stellar reports followed a report on
Thursday
(http://www.marketwatch.com/story/jobless-claims-slide-after-recent-spike-2015-03-12)
showing a sharp fall in unemployment claims.
"Volatility in the stock market rose since the end of tapering
last October, which we see as the first de facto tightening," said
Daniel Skelly, lead portfolio manager at Morgan Stanley Wealth
Management. "While we still see modest returns this year,
likelihood of more choppy trades is high."
Skelly noted that mixed economic picture, especially lack of
wage growth, overall slack in the labor market and the fragile
state of the rest of the world economy provide enough reasons for
the Federal Reserve to be hesitant with an interest-rate increase
this year.
Regardless, Skelly thinks market reaction to the eventual hike
will be measured.
The Federal Open Market Committee meets on Tuesday and
Wednesday, and although no rate changes are expected, investors
will closely be watching Chairwoman Janet Yellen's news conference
for hints on how patient the central bank will be before tightening
its monetary policy.
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management, said the Federal Reserve will probably remove the word
"patient" from the statement but is likely to have a very
deliberate wording to soothe the market in light of falling
inflation and overseas developments.
Friday's data: The University of Michigan's consumer sentiment
index dropped to its lowest level since November.
Separately, despite the first rise in gasoline costs since last
summer, U.S. producer prices fell in February for a fourth straight
month, mainly due to a sharp drop in volatile category of retail
trade margins.
Earnings: Clothing retailer Ann Inc.(ANN) delivered a surprise
fiscal fourth-quarter profit, as both total sales and same-store
sales beat expectations. Shares jumped 8.1%.
Movers and shakers: Shares of Aéropostale Inc.(ARO) dived 17%
after the apparel retailer said it forecast a larger-than-expected
loss in the first quarter.
FXCM Inc.(FXCM) surged 20% to $2.58 after the foreign-exchange
broker's fourth-quarter earnings released on Thursday topped
consensus estimates
(http://www.marketwatch.com/story/fxcms-stock-rallies-after-better-than-expected-profit-sales-2015-03-12).
Herbalife Ltd.(HLF) jumped 8.2% after a Wall Street Journal
report that federal investigators were interviewing people
connected to hedge-fund billionaire Bill Ackman in a possible
stock-manipulation probe
(http://www.marketwatch.com/story/ackmans-people-interviewed-in-potential-herbalife-manipulation-probe-2015-03-12).
For more on notable movers read our Movers & Shakers column.
(http://www.marketwatch.com/story/ann-buckle-hibbett-earnings-in-focus-2015-03-13)
Other markets: In Asia, the Nikkei Average jumped above 19,000
for the first time since April 2000
(http://www.marketwatch.com/storyno-meta-for-guid). European
markets finished higher.
Crude oil accelerated losses after the International Energy
Agency said the recovery for oil prices remains fragile
(http://www.marketwatch.com/story/iea-oil-price-recovery-still-fragile-2015-03-13)
amid a production rebound in the U.S. and brimming inventories.
Over the week, crude fell 9.6%, after falling $2.21 or 4.7% to
$44.84.
Meanwhile, gold futures lost 1% over the week but held their
ground above $1,150 an ounce on Friday.
Gold still has a shot at $2,000 an ounce
(http://www.marketwatch.com/story/gold-still-has-a-shot-at-2000-an-ounce-2015-03-13)
The ICE dollar index (DXY) climbed above 100, for the first time
since March 2003.
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