U.S. market indexes were lower on Tuesday as investors await the FOMC’s meeting results on Wednesday afternoon with new projections on rates for the near term. For the day the Dow Jones Industrial Average closed at 17,674.82 for a loss of 57.66 points or 0.33%. The Standard & Poor's 500 was also lower, closing at 2,075.32 for a loss of 3.74 points or 0.18%. The Nasdaq Composite closed lower at 4,843.55 for a loss of 4.89 points or 0.10%. The VIX Volatility Index was down slightly for the day at 20.62 for a loss of 0.35 points or 1.67%.
For the day, the leading economic reports did little to help markets. The day’s leading report included Retail Sales which was slightly above consensus with an increase of 0.5% for the month compared to consensus of 0.3%. While above consensus, retail sales were down from the previous month’s 1.3%. Other reports included the NFIB Small Business Index which was slightly higher than consensus at 93.8 versus the estimate of 93.5. The Import and Export Prices report showed import prices up 1.4% and export prices also higher by 1.1% for the month. Business inventories were down with a monthly change of 0.1%, below consensus of 0.2% and the prior month's 0.3%. For the week, the four-week Treasury auction on Tuesday reported a rate of 0.240%.
In the Dow Jones Industrial Average, stocks leading gains and losses included:
Gains (%)
- General Electric (GE, Financial) 2.11.
- Procter & Gamble (PG, Financial) 0.92.
- Walt Disney (DIS, Financial) 0.87.
Losses (%)
- American Express (AXP, Financial) -4.11.
- Home Depot (HD, Financial) -2.03.
- JPMorgan (JPM, Financial) -1.86.
Top sectors leading losses in the broad market included financial, materials and consumer discretionary. In commodities, gold traded higher as evidenced by the SPDR Gold Trust which reported a gain of 0.10 points or 0.08%. The dollar was higher for the day as the U.S. Dollar Index closed at 94.93 for a gain of 0.54 points or 0.57%.
The focus of the day continued to be on the Federal Reserve’s two-day policy meeting. Since most investors don’t expect the Fed to raise rates in its two-day meeting this week, following the Fed’s meeting Wednesday investors will mostly be watching for updated projections from the FOMC on interest rate increases over the next two years. Previous projections had the Fed aggressively raising rates in 2016; however the pace of rate increases has slowed considerably with the next rate increase most likely in September.
On Monday, CNBC provided insight on market sentiment from survey results of the market’s leading economists and investment managers. The results show the path for rate increases down considerably over the next few months.
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