Stock Market Closes Mixed as Bond Market Rises Amid Mixed Inflation Signals

Strategic Insights -

The stock market closed in a mixed fashion yesterday, contrary to recent trading sessions, as the bond market rose. This separation may be repeated today, when the Consumer Price Index, the most well-known gauge of inflation, is released. The Producer Price Index for February was released before the market opened, showing favorable news on inflation that should have pleased both the stock and bond markets. However, after initial rallies, the main stock indexes fell sharply. The Dow Jones industrial average closed with a loss, while the Standard & Poor's 500 and Nasdaq composite indexes were mostly unchanged.

Key Takeaways:

  • The stock market closed mixed yesterday, contradicting recent trading sessions, with the bond market rising.
  • The Dow Jones industrial average closed with a loss of 13.39 points, to 3,849.59, while the broader S.& P. 500 fell 0.38 point, to 467.01.
  • The Nasdaq index rose 0.72 point, to 793.52, while the New York Stock Exchange Composite Index fell 0.02 point, to 258.99.
  • Four stocks dragged down the Dow industrials more than 12 points, led by United Technologies, General Motors, McDonald's, and Boeing.
  • Perrigo, a maker of generic cough and cold medicines, was the most actively traded stock at 10 million shares, with shares falling 5 to 22 3/8.
  • Catellus Development, a property developer and asset manager, was the second-most active stock, with shares falling 3/8 to 7 1/4.

Statistics:

  • Dow Jones industrial average fell 13.39 points, to 3,849.59.
  • S.& P. 500 index fell 0.38 point, to 467.01, on relatively heavy volume of 329.3 million shares.
  • Advancing stocks led decliners, 1,138 to 1,000.
  • Bond prices rose, restraining the yield on the 30-year Treasury bond, which brushed perilously close to 7 percent on Friday.
  • Producer Price Index rose 5-tenths of 1 percent, more than Wall Street economists' expectations of four-tenths of 1 percent.
  • Core rate - stripped of food and energy prices - was up just one-tenth of 1 percent.

Sources:

  • "Market Citigroup; Dow Falls 13.39 Points." The New York Times, Sec. B, p. 1. (Undated, mention of "yesterday" and "Friday")
  • Cited comments from Alan R. Ackerman, a market strategist for Reich & Company, and Harrison Roth, senior options strategist at Cowen & Company.