Stocks sharply lower with Dow off 150 points; Strong dollar, oil weigh

Brendan McDermid | Reuters Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

U.S. stocks traded nearly 1 percent lower on Tuesday, pressured by a surge in the dollar and some weakness in oil.

There’s “concern that energy and the strength in the dollar will somehow be negative for the equities,” said Art Hogan, chief market strategist at Wunderlich Securities.

The U.S. dollar advanced nearly 1 percent to 11-year highs as the euro fell below $1.08 for the first time in 8 years on the beginning of QE in the euro zone.

The dollar “is getting to very dangerous levels because of the euro,” said Peter Cardillo, chief market economist at Rockwell Global Capital. He added that “we’re probably going to see a short-term top, although not anytime soon.”

The NFIB small business index for February was an encouraging 98.0, little changed from January’s 97.9 but above the key level of 96 that Hogan recommended as a benchmark.

Data releases on Tuesday include January’s wholesale inventories figures, which are expected to fall marginally on the month, marking the first monthly contraction since May last year.

January’s JOLTS survey is also due for release and is expected to show a further rise in the number of unfilled positions at U.S. companies in January to 5.05 million, the highest level in fourteen years.

Read More Strategists see bull running on, but look at their track record

Fifteen years ago on this day in 2000, the Nasdaq set its all-time closing and intraday highs of 5,048.60 and 5,132.50, respectively.

U.S. stock index futures indicated a sharply lower open on Tuesday, following weakness in Europe, as a fresh dip in the oil price weighed on investor sentiment.

Oil declined, with Brent struggling to hold above $57 a barrel and crude just above $49 a barrel. The decline comes after Goldman Sachs said in a note Monday that it expected U.S. crude to drop as far as $40 a barrel in the near-term.

The U.S. 10-year Treasury yield fell to 2.12 percent.

The Dow Jones Industrial Average opened down 150 points, or 0.83 percent, with United Technologies the greatest laggard and Chevron leading only a few blue chips higher.

The S&P 500 opened down 16 points, or 0.78 percent, at 2,062, with financials leading all ten sectors lower.

The Nasdaq opened down 42 points, or 0.86 percent, at 4,898.

Nearly six stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 70 million and a composite volume of 203 million in the open.

American Eagle Outfitters, Analogic and Verifone are due after the bell.

European equities were lower on Tuesday, with investor sentiment curbed by the fall in the price of oil and ongoing negotiations surrounding Greece.

Read More Remembering Haines’ legendary 2009 call

Chipmaker Qualcomm announced a 14-percent dividend hike to 48 cents per share as well as a $15 billion stock buyback program.

Credit Suisse has named Prudential chief Tidjane Thiam as its new chief executive officer. His appointment will become effective at the end of June, when current CEO Brady Dougan will step down. Prudential shares slipped more than 2 percent in pre-market trade, while Credit Suisse shares surged more than 7 percent in pre-market trade on anticipation of the new leadership team

UBS upgraded Hewlett-Packard to “buy” from “neutral,” noting a recent pullback in the stock’s price and CEO Meg Whitman’s upgrade of the executive team.

Urban Outfitters reported quarterly profit of 60 cents per share, 2 cents above estimates, with revenue in line. Comparable store sales were up six percent for the quarter, better than the two percent reported for the full year. Urban’s rise in comparable store sales was its first in a year.

“This improvement is definitely powerful for Urban and sets it apart from its peers,” said Jeff Toohig of ITG Market Research.

“I do think we’re starting to see signs that the opportunity for the consumer market is moving in the right direction,” he added.

Read More Early movers: QCOM, CS, URBN, SWKS, PG & more

Skyworks Solutions will join the S&P 500 after the closing of trading Wednesday. The semiconductor maker will replace PetSmart—which is being sold to private equity firm BC Partners—in the benchmark index.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 17806.85
-188.87 -1.05%
S&P 500 S&P 500 Index 2058.61
-20.82 -1.00%
NASDAQ Nasdaq Composite Index 4889.32
-53.12 -1.07%

As of Monday’s close:

  • The Dow Jones industrial average was within one standard deviation above its 50-day moving average. Since 1981 the index has been in this position 6.50 percent of all trading days, according to quantitative analytics tool Kensho. The probability of the index moving lower is 52.2 percent and the probability of it moving higher in the days following is 47.8 percent.
  • The S&P 500 was within half a standard deviation above its 50-day moving average. Since 1980 the index has been in this position 5.22 percent of all trading days, according to Kensho. The probability of the index moving higher in the days following is 51.5 percent and the probability of it moving lower is 48.5 percent.
  • The Nasdaq composite was within one-and-a-half standard deviations above its 50-day moving average. Since 1980 the index has been in this position 7.39 percent of all trading days, according to Kensho. The probability of the index moving lower is 61.7 percent and the probability of it moving higher is 38.3 percent.

CNBC’s Jenny Cosgrave and Peter Schacknow contributed to this report.

Disclosure: CNBC’s parent NBCUniversal is a minority investor in Kensho.

On tap this week:

Tuesday

Earnings: Analogic, China Lodging Group, Habit Restaurants, NCI Building Systems, Verifone

10:00 am: JOLTs

10:00 am: Wholesale trade

1:00 pm: $24 billion three-year notes auction

Wednesday

Earnings: Express, Vera Bradley, Box, Home Inns and Hotels, Krispy Kreme, Men’s Wearhouse, Shake Shack

7:00 am: Mortgage applications

1:00 pm: $21 billion 10-year notes auctions

Thursday

Earnings: Dollar General, Hovnanian, Vail Resorts, El Pollo Loco, Springleaf, Aeropostale, OncoMed, JA Solar

8:30 am: Weekly jobless claims

8:30 am: Retail sales

8:30 am: Import prices

10:00 am: Business inventories

1:00 pm: $13 billion 30-year bond auction

Friday

Earnings: Ann

8:30 am: PPI

10:00 am: Consumer sentiment

This entry was posted in Markets, Stocks. Bookmark the permalink.

Leave a Reply