Stock Market Today: Dow Slips for a Third Straight Session
Federal Reserve taper conjecture and concerns about a hiccup in the economic recovery pulled on the stock market Wednesday.
Stocks got off on the wrong foot Wednesday and never quite recovered as investors continued to weigh the Federal Reserve's signals about pulling back on stimulus, as well as the state of the economy.
In an interview with the Financial Times, St. Louis Fed president James Bullard said that the central bank shouldn't waver on plans to taper its asset purchases before the end of the year despite last Friday's surprisingly disappointing August jobs report.
"There is plenty of demand for workers and there are more job openings than there are unemployed workers," he told FT.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Later in the day, the Fed's "Beige Book" – a regular report of anecdotal economic information – acknowledged that "economic growth downshifted slightly to a moderate pace in early July through August." But investors seemingly shrugged it off, with stocks broadly maintaining their levels after the release.
Declines in Dow Inc. (DOW, -1.9%) and UnitedHealth Group (UNH, -1.4%) sent the Dow Jones Industrial Average to its third straight decline – a modest 0.2% retreat to 35,031. The S&P 500 (-0.1% to 4,514) and Nasdaq Composite (-0.6% to 15,286) also finished in the red.
When investors were buying, they were buying safety, with the utility (+1.8%) and consumer staples (+0.9%) sectors coming out on top Wednesday.
Other news in the stock market today:
- The small-cap Russell 2000 dropped 1.1% to 2,249.
- Cryptocurrency exchange operator Coinbase (COIN, -3.2%) saw its shares decline after the company revealed that it had received a notice of possible enforcement action from the Securities and Exchange Commission. "Last Wednesday, after months of effort by Coinbase to engage productively, the SEC gave us what's called a Wells notice about our planned Coinbase Lend program," Chief Legal Officer Paul Grewal wrote in a Tuesday night blog post. The Coinbase Lend program would allow users to contribute to a lending pool centered around the stablecoin USD Coin, and receive a 4% interest rate in return.
- U.S. crude futures improved by 1.4% to $69.30 per barrel as Gulf Coast production struggles to get back online in the wake of Hurricane Ida.
- Gold futures slid yet again, off 0.3% to $1,793.50, as the U.S. dollar strengthened.
- The CBOE Volatility Index (VIX) slipped 1.0% to 17.96.
- Bitcoin pulled back by 0.5% to $46,453.95. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Commodities Aren't Feeling the Pinch
What else did the Beige Book tell us?
"The lack of market reaction today shows that much of these concerns are priced in," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "But a larger market pullback – which may materialize this fall either as a result of tapering announcements or other, potentially unexpected news – should provide an opportunity to re-enter positions in travel, leisure and hospitality as the recovery is most likely delayed and not cancelled completely."
That dovetails with our thoughts yesterday that the road travel stocks and other recovery picks are following looks rocky (but could ultimately be rewarding).
But one area of the market that still appears strong is commodity prices.
"Most districts noted substantial escalation in the cost of metals and metal-based products, freight and transportation services, and construction materials," the Fed says – and that's good news for commodity stocks and the broader materials sector. Companies dealing in steel, aluminum, copper and other commodities can go through nauseating boom-and-bust cycles, but the current environment continues to be in their favor.
Here, we look at seven commodity stocks that should have plenty more potency once the recovery gets back on steadier legs.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
Earn Delta SkyMiles Worth Up to $1,800 with an AMEX Business Card
Delta SkyMiles and American Express offer 150,000 on business credit card for new cardholders.
By Ellen Kennedy Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
Stock Market Today: Markets Tumble Amid Slower Economic Growth and Rising Prices
Disappointing readings on GDP and inflation helped tank equities.
By Dan Burrows Published
-
Stock Market Today: Stocks Run Out of Steam Ahead of Meta Earnings
The Dow Jones Industrial Average snapped a four-day winning streak after Boeing's first-quarter results.
By Karee Venema Published
-
Stock Market Today: Nasdaq Soars Ahead of Tesla Earnings
The EV stock rose nearly 2% ahead of its highly anticipated Q1 earnings report, due after tonight's close.
By Karee Venema Published
-
Stock Market Today: Markets Rebound Ahead of Big Week for Earnings
Equities rallied on easing geopolitical tensions, upcoming quarterly results.
By Dan Burrows Published
-
Stock Market Today: Nasdaq Spirals as Netflix Nosedives
A big earnings boom for credit card giant American Express helped the Dow notch another win.
By Karee Venema Published
-
Stock Market Today: S&P 500, Nasdaq Extend Losing Streaks
The two indexes have closed lower for five straight sessions.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published