U.S. stocks came off the lows of the day to finish mixed with the Dow and S&P 500 closing below the unchanged mark. The markets remained volatile as the White House’s top economic advisor, Gary Cohn, resigned following the announcement from President Trump promising to enact tariffs on steel and aluminum, with further details on the proposal expected, possibly as soon as tomorrow. Treasury yields and the U.S. dollar were nearly unchanged and gold and crude oil prices dipped. In some light equity news, Dollar Tree, H&R Block and Autodesk announced quarterly results.

The Dow Jones Industrial Average (DJIA) declined 83 points (0.3%) to 24,801, the S&P 500 Index lost 1 point to 2,727, and the NASDAQ Composite gained 25 points (0.3%) to 7,397. In moderately heavy volume, 840 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil declined $1.45 to $61.15 per barrel and wholesale gasoline shed $0.01 to $1.92 per gallon. Elsewhere, the Bloomberg gold spot price decreased $8.76 to $1,325.80 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly unchanged at 89.58.

The ADP Employment Change Report showed private sector payrolls rose by 235,000 jobs in February, above the Bloomberg forecast of a 200,000 gain, while January’s increase of 234,000 jobs was revised to a 244,000 increase. Today’s ADP data, which does not include government hiring and firing, comes ahead of Friday’s broader February nonfarm payroll report, expected to show jobs grew by 200,000 and private sector payrolls rose by 198,000. The unemployment rate is forecasted to dip to 4.0% from 4.1% and average hourly earnings are projected to rise 0.2% month-over-month (m/m).

Consumer credit, released in the final hour of trading, showed consumer borrowing increased by $13.9 billion during January, well shy of the $17.7 billion forecast of economists polled by Bloomberg, while December’s figure was adjusted higher to an increase of $19.2 billion from the originally reported $18.5 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose by $13.2 billion, while revolving debt, which includes credit cards, increased by $700 million.

At 2:00 p.m. ET, the Fed delivered its Beige Book, an anecdotal look at business activity across the nation used as a monetary policy preparation tool for the two-day meeting set to end March 21st. The report indicated that the 12 Federal Reserve Districts in January and February reported a modest to moderate pace of growth in economic activity, as well as broadly solid tourism activity, and that on balance, Districts reported modest growth in home sales and construction. Most Districts also saw employers raise wages and expand benefit packages in response to tight labor market conditions, and prices increased in all Districts at mostly moderate rates of growth.

Treasuries finished mostly flat, with the yields on the 2-year note and the 30-year bond nearly unchanged at 2.25% and 3.15%, respectively, while the yield on the 10-year note dipped 1 basis point to 2.88%.

Bond yields and the U.S. dollar continue to be choppy, with the former elevated and the latter sustaining a downtrend, while stocks remain wobbly. The markets continue to grapple with recently flared-up Fed rate hike uncertainty, global trade concerns, and yesterday’s resignation of President Donald Trump’s top economic advisor Gary Cohn, all being sources of the recent rise in volatility.

Schwab Center for Financial Research – Market Analysis Group

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