Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Thursday, 03/07” will be posted around 8:30am EDT, Thursday.
THE GIST (“THE WHAT”)
The S&P 500 index closed lower for the third straight day as investors keenly look forward for fresh news around U.S. – China trade negotiations. While the index continues to consolidate within key technical levels, weaker-than-expected economic data fueled the day’s losses on renewed concerns of slowing economic growth.
Health Care led the day’s declines and Energy stocks fell sharply alongside a slide in oil prices. With nine out of the eleven primary sectors trading lower, the index closed near session lows at 2771.45, down 18.20 points and losing 0.65% over previous session’s close.
THE DETAILS (The “How & Why”):
On economic data front, U.S. trade deficits hit a decade high in 2018, despite the Trump administration’s efforts to narrow the huge gap. Meanwhile, ADP employment report indicated that private sector added 183,000 jobs in February compared to the 213,000 jobs added in the previous month, renewing concerns of a slowing economy. Investors will be looking forward for Friday’s job report for cues on the health of the economy.
Health Care experienced intense selling in today’s risk-aversion mood, closing lower by 1.47%. Nektar Therapeutics, Perrigo Co and HCA HealthCare Inc. were the worst decliners within the sector, falling 5.23%, 4.85% and 4.92%, respectively.
Oil prices fell sharply on concerns of rising domestic inventories, weighing down heavily on energy stocks. Energy sector closed sharply lower by 1.28% led by a 4.79% decline in Halliburton Co.
Industrials, Financials, Technology and Consumer Discretionary and Technology were other notable decliners of the session. General Electric Co shed another 7.89%, leading the Industrials space lower following a net cash outflow forecasted for this year by this struggling conglomorate. Airlines and transportation stocks also extended their decline on concerns of slowing economic growth.
Micron Technologies sparked a sell-off in semiconductor stocks, tumbling 5.15% after two analysts lowered their estimates for this chip maker, citing falling memory chip prices. Advanced Micro Devices Inc., NVIDIA Corp and Lam Research Corp. fell in tandem by 4.64%, 2.86% and 2.51%, respectively.
Amid the broad based sell-off, Materials was the only sector to close with modest gains of 0.20%. LyondellBasell Industries NV was the top gainer the session, jumping 6.11% and boosting sentiment within the sector after Goldman Sachs upgraded this multinational chemical company, citing potential for its ethylene chain.