Dollar surge pushes Dow off 200 points, all S&P sectors lower

U.S. stocks traded lower on Friday as investors eyed economic data amid renewed dollar strength and weaker oil prices.

“I think the market is trading off the dollar. Obviously the dollar strength is pressuring stocks,” said Peter Boockvar, chief market analyst at The Lindsey Group.

The U.S. dollar edged higher after trading lower on Thursday. The euro fell to near 12-year lows again.

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The Dow fell more than 100 points in morning trade as the major indices extended losses. The Nasdaq briefly attempted to trade higher.

“We’re looking at a choppy market,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “Many traders are not going to put in many trades before next week’s major events.”

The Federal Open Market Committee meets next week. Quarterly options also expire.

“There’s no question that the chances of the Fed statement being altered have risen, certainly to about 50 percent. But there are other factors that (indicate) the Fed is not going to change it’s language,” Cardillo said.

U.S. stocks surged upward on Thursday as the dollar paused its rally, in a continuation of several days of downward and upward market swings as investors digested mixed economic data and attempted to gauge the timing of an interest rate hike.

“I think it’s just the fact that the market is pretty fairly valued,” said Maris Ogg, president of Tower Bridge Advisors. “There’s a lot more risk when the market is fairly valued. We probably have to suffer through this volatility through this year.”

“The path of least resistance at this moment seems to be down, not big, but there’s a lack of conviction,” she said. “We’re trading a little with oil. I wouldn’t be surprised to see a 5 to 10 percent (correction) in the next few months.”

The U.S. Producer Price index for February showed a decline of 0.5 percent, missing estimates of a 0.3 percent gain.

Consumer sentiment data showed a preliminary read of 91.2 in March versus 95.4 in February.

“All (consumer data) are impacted by weather,” Ogg said. “I think the spring will bring spending and retail sales will” pick up.

In Europe, equities traded lower as Greece remained in the spotlight.

Prime Minister Alexis Tsipras meets European Parliament President Martin Schulz and Jean-Claude Juncker, European Commission president, Friday.

The country is expected to repay a 340 million euros ($360 million) tranche of its loan from the International Monetary Fund back today.

Read More Patience with Greece running low after tough week

In the unfolding story over Herbalife, Dow Jones reports that prosecutors are interviewing people tied to investor Bill Ackman in a case involving potential manipulation of Herbalife’s stock. Ackman has had a long-standing short position in Herbalife, saying the nutritional supplements maker is a pyramid scheme. He told CNBC he has not heard from the FBI or the Justice Department, and that he’s happy to answer any questions they may have for him.

Google is not planning to compete aggressively with soon-to-be-public GoDaddy in the internet domain space, according to a report in Friday’s New York Post.

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Pfizer’s pain drug Lyrica did not meet goals in a study that examined its effectiveness in treating adolescents with fibromyalgia.

Since the release of February’s jobs report last Friday, stocks have fluctuated with changing perceptions of an interest rate hike and strengthening in the dollar.

“Today’s PPI shows that inflation is not the problem. I suggest that fixation (on the Fed) has caused this market to act in a very volatile manner and preparing itself for declines. Not a fundamental issue,” Cardillo said.

The Dow Jones Industrial Average traded down 182 points, or 1.02 percent, at 17,711, with IBM and United Health Group the only advancer.

The S&P 500 traded down 18 points, or 0.87 percent, at 2,048, with energy leading all ten sectors lower.

The Nasdaq traded down 31 points, or 0.64 percent, at 4,861.

The U.S. 10-year Treasury yield traded near 2.10 percent.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 15.

Three shares declined for every advancer on the New York Stock Exchange, with an exchange volume of 56 million and a composite volume of 144 million in the open.

Crude oil futures fell 88 cents to $46.16 a barrel on the New York Mercantile Exchange. Gold futures gained $5.30 to $1,157.10 an ounce in the open.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 17689.27
-205.95 -1.15%
S&P 500 S&P 500 Index 2046.87
-19.08 -0.92%
NASDAQ Nasdaq Composite Index 4857.48
-35.81 -0.73%

As of Thursday’s close:

  • The Dow Jones industrial average was within half a standard deviation above its 50-day moving average. Since 1981 the index has been in this position 5.49 percent of all trading days, according to quantitative analytics tool Kensho. The probability of the index moving lower is 47.1 percent and the probability of it moving higher in the days following is 52.9 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 5.10 percent of all trading days, according to Kensho. The probability of the index moving higher in the days following is 56.3 percent and the probability of it moving lower is 43.7 percent.
  • The Nasdaq composite was within one standard deviation above its 50-day moving average. Since 1980 the index has been in this position 6.46 percent of all trading days, according to Kensho. The probability of the index moving lower is 54.5 percent and the probability of it moving higher is 45.5 percent.

CNBC’s Katrina Bishop and Peter Schacknow contributed to this report.

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

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