Stocks Post Biggest Drop of New Year

by Susie Olson February 2, 2018, 0:19
Stocks Post Biggest Drop of New Year

While the Federal Reserve is not expected to lower interest rates at its two-day meeting that starts tomorrow, outgoing Chair Janet Yellen's last statement will be scrutinized for clues on the future path of rate hikes. The Russell 2000 index of smaller-company stocks gave up 1 point, or 0.1 percent, to 1,580. By notching another month of gains in January, the Dow and S&P 500 are on track to extend their win streaks to 10.

The central bank raised rates three times previous year and sees three additional hikes in 2018 even as it continues to trim its balance sheet on a largely pre-set schedule.

Pfizer shares were lower by 1.6 percent.

"The clear message from these results is that we have these negative headlines about the iPhone 10 but it's of course not the only client of AMS", Moeller said, referring to a JP Morgan note last week saying iPhone X orders are weakening, which had hit the stock. Express Scripts, McKesson, Humana, Cigna, UnitedHealth, CVS Health and Centene were down between 5.3 percent and 7.2 percent. Oil prices headed lower.

Declining issues outnumbered advancing ones on the NYSE by a 4.65-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored decliners.

While no one knows whether a market pullback will arrive near term as a result of higher bond yields, Higgins says there's unlikely to be a substantial correction until expectations for corporate earnings growth reverse.

Asian stocks were mixed Wednesday after Wall Street recorded its biggest decline since August.

"A simple question that may come to investors mind, is 'why would I remain in equities when two-year US treasury bills can provide the same divided yield return of the S&P 500?'".

U.S. stocks close lower on sell-off
Health-related shares were broadly lower, with health insurers UnitedHealth Group losing 4.4 per cent and Cigna 7.2 per cent. Stocks are opening solidly higher on Wall Street after a number of big US companies reported strong quarterly earnings.

Apple was down another 1.1 percent on fears that the company will cut production of the iPhone X. Import prices dropped 1.6 per cent and export prices declined by 3 per cent for the quarter.

The Russell 2000 is down 33.08 points, or 2.1 percent.

The selloff earlier in the week had been prompted by an increase in U.S. Treasury yields to multi-year highs. Rising yields make bonds more appealing to investors seeking income, but they can also lead to higher financing costs for companies, homebuyers and other borrowers. The company has Relative Strength Index (RSI 14) of 29.03 together with Average True Range (ATR 14) of 1.08. This week yields have hovered at the highest level since April 2014.

Japan's Nikkei rose 0.1 per cent as the yen eased a little, while South Korea notched a record.

MARKETS OVERSEAS: Germany's DAX fell 0.2 percent, while France's CAC 40 gained less than 0.1 percent. Seoul's Kospi added 0.3 percent to 2,574.51.

The seven biggest percentage losers among the S&P 500 components trading premarket were health stocks.

Hong Kong's Hang Seng has been the best performer for the year so far with a rise of nearly 11 per cent, while Shanghai blue chips ran into profit-taking on Monday.

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