U.S. equities finished in the red, but well off the lows of the day after tumbling in midday action, as a risk-off tone occupied Wall Street amid continued uneasiness of the spreading of the coronavirus outside of the epicenter of China. The moves came despite some relief early on that the Asian nation has been making moves in an attempt to stem the uneasiness surrounding the economic impact. Some earnings and M&A news, as well as upbeat domestic economic data, aided in keeping the losses in check. Morgan Stanley agreed to acquire E-Trade Financial for $13.0 billion, Zillow and Domino’s Pizza rallied on their earnings reports, Leading Indicators rebounded much more than expected and regional manufacturing output jumped to a three-year high. Treasury yields finished lower and the U.S. dollar saw a modest increase, while gold rose in a flight to safety and crude oil prices gained ground. Europe turned lower in the final minutes of trading overseas, and Asia was mixed.
The Dow Jones Industrial Average fell 128 points (0.4%) to 29,220, the S&P 500 Index lost 13 points (0.4%) to 3,373 and the Nasdaq Composite was down 66 points (0.7%) to 9,751. In heavy volume, 926 million shares were traded on the NYSE and 2.7 billion shares changed hands on the NASDAQ. WTI crude oil rose $0.39 to $53.88 per barrel and wholesale gasoline was unchanged at $1.66 per gallon. Elsewhere, the Bloomberg gold spot price was up $7.90 to $1,619.60 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% to 99.87.
The Conference Board’s Index of Leading Economic Indicators (LEI) for January was 0.8% higher month-over-month (m/m), compared to the Bloomberg projection of a 0.4% increase and December’s unrevised 0.3% decline. The index’s solid upward move was led by decisive positive contributions from jobless claims and building permits, while stock prices, credit conditions and consumer expectations also improved, more than offsetting the continued decline in ISM new orders.
Weekly initial jobless claims rose by 4,000 to 210,000, matching estimates, with the prior week’s figure being revised higher by 1,000 to 206,000. The four-week moving average decreased by 3,250 to 209,000, while continuing claims rose by 25,000 to 1,726,000, north of estimates of 1,717,000.
The Philly Fed Manufacturing Index in February jumped to 36.7—the highest in three years—from the 17.0 posted the month prior, versus expectations of a decline to 11.0, moving further into expansion territory (a reading above zero).
Treasuries rose, as the yield on the 2-year note was down 3 basis points (bps) to 1.38%, while the yields on the 10-year note and 30-year bond declined 5 bps to 1.52% and 1.97%, respectively.
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