Wednesday, March 30, 2022

DJIA: 35,228.81, down 65.38
S&P 500: 4,602.45, down 29.15
Nasdaq: 14,442.27, down 177.37

Stocks lower; Treasuries strengthen

U.S. stocks finished lower on Wednesday, pausing their recent relief rally. The S&P 500 fell 0.6%, snapping a four-session winning streak, though the broad benchmark remains within 4.1% of its January record and has climbed over 10% since March 14. The Dow lost 65 points, while the Nasdaq Composite retreated 1.2%. Geopolitical updates weighed on sentiment, with the U.S. and its allies remaining skeptical of Russia’s pledge to reduce military activity. Furthermore, Moscow reported no breakthroughs during the latest round of ceasefire talks. West Texas Intermediate crude rebounded 3% to $107.38/barrel, ending a two-day slide.

Seven of 11 S&P 500 sectors closed negative territory, with Consumer Discretionary shares leading the downturn following disappointing earnings. Chewy Inc. dropped 16.1% after the pet supply retailer offered a disappointing outlook. RH slumped 13.3% after the home furnishing company flagged weaker demand trends. Meanwhile, apparel maker PVH Corp. fell 6.5% on soft guidance amid lingering macro uncertainty and ongoing inflation. Lululemon Athletica Inc. bucked the downtrend, jumping 9.6% on improved forecasts. Technology also lagged, with chipmakers particularly weak.

Treasuries strengthened after the yield on the two-year note briefly surpassed the 10-year note yield for the first time since August 2019 on Tuesday. The yield on the longer-dated maturity ended today’s session five basis points (0.05%) lower at 2.34%, while the two-year note yield dipped by the same amount to 2.31%. On the data front, a release revealed private payrolls increased by 455,000 in March. Separately, a final reading of U.S. fourth-quarter GDP reflected a 6.9% annualized growth rate during the October-December period, modestly below the previously reported 7% print.

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