U.S. Stocks Finish Choppy Trading Session Slightly Lower

Following the notable advance seen to close out the previous week, stocks showed a lack of direction throughout much of the trading session on Friday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session slightly lower. While the Dow dipped 46.46 points or 0.1 percent to 34,051.70, the Nasdaq slipped 13.96 points or 0.1 percent to 12,212.60 and the S&P 500 edged down 1.61 points or less than a tenth of a percent to 4,167.87.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

While the Fed is widely expected to raise interest rates by another 25 basis points, traders will pay close attention to the accompanying statement for clues about the outlook for rates.

Ahead of the meeting, CME Group’s FedWatch Tool is indicating an 88.9 percent chance the Fed will raise rates by 25 basis points and a 64.1 percent chance the central bank will subsequently leave rates unchanged in June.

The Labor Department’s closely watched monthly jobs report is also likely to attract attention later in the week, with the report due to be released on Friday.

Meanwhile, shares of JPMorgan Chase (JPM) jumped by 2.1 percent after the financial giant announced the acquisition of the substantial majority of assets and assumed the deposits and certain other liabilities of troubled lender First Republic Bank (FRC).

“Our government invited us and others to step up, and we did,” said JPMorgan Chase Chairman and CEO Jamie Dimon. “Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”

In U.S. economic news, the Institute for Supply Management released a report showing manufacturing activity contracted for the sixth consecutive month in April, although the pace of contraction slowed by more than expected.

The ISM said its manufacturing PMI rose to 47.1 in April from 46.3 in March, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 46.6.

The Commerce Department also released a report showing an unexpected increase in U.S construction spending in the month of March.


Most of the major sectors ended the day showing only modest moves, contributing to the lackluster performance by the broader markets.

Banking stocks showed a significant move to the downside, however, with the KBW Bank Index falling by 1.8 percent.

Considerable weakness was also visible among retail stocks, as reflected by the 1.5 percent drop by the Dow Jones U.S. Retail Index.

Steel and commercial real estate stocks also saw notable weakness on the day, while transportation and pharmaceutical stocks moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, with several major markets closed for May Day. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Australia’s S&P/ASX 200 Index rose by 0.4 percent.

Meanwhile, the major European markets all remained closed on the day.

In the bond market, treasuries showed a significant move back to the downside following the rebound seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 12.2 basis points to 3.574 percent.

Looking Ahead

Amid a relatively quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the latest earnings.

Trading activity may remain somewhat subdued, however, as traders look ahead to the Fed’s monetary policy decision on Wednesday.

Source: Read Full Article