Stocks Lose Steam in Final Minutes…..

U.S. equities finished modestly lower in a rocky session that saw a 700-point swing in the Dow, as the optimism over a flattening of the COVID-19 pandemic’s curve that sparked yesterday’s rally was tempered by news of a large increase in deaths out of New York related to virus. The early positive sentiment came amid signs of cases leveling off in the city, as well as key hot spots of Italy and Spain, along with the continued recovery in the original epicenter of China and in South Korea. Treasury yields were mostly higher as bond prices fell, while the U.S. dollar was sharply lower and gold lost ground. Crude oil prices declined with attention on whether OPEC+ will deliver production cuts and if Russia and Saudi Arabia can end their price war. On the equity front, Dow member Exxon Mobil announced a 30% reduction in capital spending and Kraft Heinz issued a positive Q1 pre-announcement. However, economic news showed that small business optimism in the U.S. fell by the most on record and job openings slipped. Europe finished solidly higher, and most of Asia saw gains.

The Dow Jones Industrial Average fell 26 points (0.1%) to 22,654, the S&P 500 Index declined 4 points (0.2%) to 2,659 and the Nasdaq Composite lost 26 points (0.3%) to 7,887. In heavy volume, 1.4 billion shares were traded on the NYSE and 4.0 billion shares changed hands on the NASDAQ. WTI crude oil shed $2.45 to $23.63 per barrel and wholesale gasoline was down $0.05 at $0.65 per gallon. Elsewhere, the Bloomberg gold spot price was $3.30 lower at $1,657.67 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.8% to 99.88.

After a bumpy session, the equity markets finished with modest losses, as positive news regarding the global fight against the COVID-19 (coronavirus) pandemic came up against news of a large increase in the number of deaths related to the virus out of New York, the current epicenter of the outbreak. Adding another layer of uncertainty for the markets is the continued volatility in the oil markets and the energy sector, with OPEC and its allies, known as OPEC+, pushing for production cuts to try to combat the oversupply dynamic that has aided the plunge in oil prices that began late last year, while Russia and Saudi Arabia are being eyed to see if they can agree to end their recent price war. However, the oil market faces a demand crisis as well in light of the global economic shutdown in response to the coronavirus pandemic.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for March fell to 96.4, from February’s 104.5 level. This was the largest monthly decline in the survey’s history and the index hit the lowest level since October 2016. The NFIB said nine of the ten index components declined, which is evidence that economic disruptions are escalating on Main Street as small businesses struggle to keep their doors open. The NFIB added that the small business sector is anticipating and bracing for continued economic disruptions going forward.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, declined by a smaller amount than expected to 6.88 million jobs available to be filled in February, from January’s upwardly-revised 7.01 million figure and above forecasts calling for 6.50 million. The report showed the hiring rate remained at January’s 3.9% rate and separations dipped to 3.6% from 3.7%.

Consumer credit, released in the final hour of trading, showed consumer borrowing expanded by $22.3 billion during February, the most in seven months, and well above the $14.0 billion forecast of economists polled by Bloomberg, while January’s figure was upwardly-adjusted to an increase of $12.1 billion from the originally reported $12.0 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose $18.1 billion, a 7.0% increase year-over-year (y/y), while revolving debt, which includes credit cards, rose by $4.2 billion, a 4.6% y/y rise.

Treasuries were mostly lower, as the yield on the 2-year note was flat at 0.27%, while the yield on the 10-year note gained 4 basis points (bps) to 0.72%, and the 30-year bond rate gained 2 bps to 1.31%.

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