Stocks fall, manufacturing data on tap

U.S. stocks fell Wednesday morning to start March ahead of key manufacturing data.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) edged down 0.3%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) neared the flatline.

Stocks had pointed toward a rebound early Wednesday after better-than-expected factory and services activity in China signaled the country’s “rapid near-term rebound” in February, said Andrew Tyler, head of the US Market Intelligence team at JP Morgan.

The yield on the benchmark 10-year U.S. Treasury note moved upward to 3.96% Wednesday morning. Crude oil traded weaker, with U.S. benchmark WTI down at $76.56 a barrel.

On the economic data side in the U.S., Wall Street awaits manufacturing data out on Wednesday morning, which could reveal more about the impact of monetary policy tightening.

Stocks fell Tuesday, rounding out the last day of a volatile month of February on Wall Street. According to JP Morgan’s trading desk, February’s month-end rebalance drove some weakness in equities and strength in bonds Tuesday afternoon. In addition, Goldman Sachs’ (GS) investor day featured a 3.8% selloff for the stock as the bank considers alternatives for its struggling consumer platforms business.

“After the recent strategic missteps, this update is clearly more evolution than revolution,” JPM financial sector specialist James Goulbourne wrote in a note on Tuesday, “with profitability in the ancillary Platform Solutions business, rather than deeper expense cuts in core business (what the market really wanted), combined with declining balance sheet exposure expected to drive returns higher.”

With February in the rearview, the S&P 500 is now up 3.4% this year, according to data from Bespoke Investment Group. Mega-caps have been a massive driver of the index moves. That said, 20 of the largest stocks in the S&P 500 have accounted for most of the index’s gains.

Now, as the calendar turns, March historically sees the S&P 500’s gains in the second half of the month, Bespoke Investment Group noted.

The path of the Federal Reserve’s rate hikes remains in focus for investors. In his first public speech since taking office last month, Chicago Fed President Austan Goolsbee said on Tuesday it would be a “danger and a mistake for policy makers to rely too heavily on market reactions” and emphasized the importance to “supplement these traditional data with observations on the ground from the real economy.”

However, Goolsbee, who will be a voter at this year’s policy-setting Federal Open Market Committee meeting, didn’t comment on monetary policy.

Since last year, the Fed has sharply raised rates in an effort to cool inflation. But inflation remains sticky. Policymakers will be releasing new projections after the central bank’s March 21-22 meeting.

Austan Goolsbee, Professor of the University of Chicago, speaks during the Obama Foundation

Austan Goolsbee. REUTERS/Brendan McDermid

On the housing front, mortgage rates are moving upward, pushing buyers to the sidelines as the spring housing market is underway. Both purchase and refinance applications slumped last week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume of purchase applications hit a 28-year low, down 44% from a year ago.

Here are some of the tickers trending on Yahoo Finance today:

  • Eli Lilly and Company (LLY): Shares of the drugmaker edged up Wednesday morning as it expects to cap out-of-pocket cost of its insulin at $35 a month. The plan comes as a promise to provide critical relief to some people with diabetes, who at times face higher medical costs.

  • Kohl’s (KSS): Shares of the retail giant declined 1% Wednesday morning after the company posted a surprise fourth quarter loss and sales slumped as consumer habits shift away from discretionary spending.

  • Wendy’s (WEN): The fast-food chain announced in its quarterly earnings about its plans to target sales growth through 2025 as it streamlines costs.

  • Rivian (RIVN): The electric truck manufacturer’s guidance for fiscal 2023 deliveries came in 20% below estimates as the EV maker struggles to scale up its truck, van, and SUV production.

  • Nio (NIO): Another EV maker gave weak revenue guidance, the Chinese premium EV startup, reported a much worse-than-expected fourth quarter loss as margins took a hit due to in part the “losses on purchase commitments.” The stock fell 3% Wednesday.

  • HP (HPQ): The PC and printing giant’s stock wavered after the company posted mix results amid a soft demand environment for personal computers. Fiscal-quarter sales dropped 18% year-over-year. Printer sales sank 5% from a year ago.

  • Lowe’s (LOW): The home-improvement company reported weaker fiscal sales in the fourth quarter and issued a conservative outlook ahead, with comparable sales expected to be flat to down 2% compared to the prior year.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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