Stocks Fall as Speculation of Discount Rate Hike Temers Gains

Strategic Insights -

The US stock market experienced a mixed trading day, with financial and energy companies leading the decline due to speculation of a potential hike in the discount rate. Despite this, the Dow Jones Industrial Average rose to an almost 18-month high, driven by positive economic indicators such as growth in Philadelphia manufacturing and a drop in jobless claims. Key companies like FedEx Corp. and Nike Inc. reported impressive earnings, while commodity producers saw their gauges drop as the dollar rose, reducing the appeal of commodities as an alternative investment.

Key Takeaways:

  • The Dow Jones Industrial Average rose to an almost 18-month high, driven by positive economic indicators.
  • FedEx Corp. reported a profit more than double its previous year's results.
  • Nike Inc. rallied on higher-than-estimated earnings.
  • Commodity producers in the S&P 500 dropped at least 0.7 percent due to the strong dollar.
  • The S&P 500 climbed for a third straight day, extending its rally from a 12-year low to 72 percent.
  • The index rose to its highest intraday level since September 2008.
  • Bank of America Corp. and Schlumberger Ltd. paced declines in financial and energy companies.

Statistics:

  • The Dow Jones Industrial Average rose 45.5 points, or 0.4 percent, to 10,779.17.
  • The S&P 500 slipped less than 0.1 percent to 1,165.83.
  • The Dollar Index jumped 0.8 percent to 80.257, its biggest gain in a month.
  • The S&P 500 fell as much as 0.5 percent after the last discount rate hike on February 18.
  • The central bank may boost the discount rate again before the next Federal Open Market Committee meeting on April 28.
  • Commodity prices dropped at least 0.7 percent due to the strong dollar.
  • The S&P 500 has rallied 72 percent from a 12-year low last March.

Sources:

  • Bloomberg
  • Reuters
  • Euclid Infotech Pvt. Ltd.
  • US Global Investors Inc.