Nasdaq Pulls Back Sharply But Dow Holds On To Modest Gain

Stocks came under pressure over the course of the trading day on Wednesday after moving to the upside early in the session. Reflecting weakness among technology stocks, the tech-heavy Nasdaq led the way lower.

After jumping by 1.1 percent in the previous session to its highest closing level in nearly two months, the Nasdaq slumped 138.26 points or 1 percent to 13,857.84.

The S&P 500 also slid 16.93 points or 0.4 percent to 4,124.66 after reaching a new record intraday high in early trading.

On the other hand, the Dow pulled back well off its best levels of the day but still closed up 53.62 points or 0.2 percent at 33,730.89. The blue chip index also set a new record intraday high before giving back ground.

The uptick by the Dow was partly due to a strong gain by Goldman Sachs (GS), with the financial giant jumping by 2.3 percent after reporting first quarter results that beat analyst estimates on both the top and bottom lines.

Banking giant Wells Fargo (WFC) also showed a strong move to the upside after reporting better than expected first quarter results.

Meanwhile, shares of JPMorgan Chase (JPM) moved notably lower even though the financial giant reported first quarter results that exceeded expectations.

The weakness that emerged in the broader markets seemed to coincide with a downturn by shares of Coinbase (COIN), which spiked to a high of $429.54 but pulled back well below their debut price of $381 before closing at $328.28.

The cryptocurrency exchange’s direct listing on the Nasdaq was closely watched by investors and described as a “watershed moment” for the industry.

Traders also kept an eye on remarks by Federal Reserve Chair Jerome Powell, who told the Economic Club of Washington the central bank is likely to scale back its asset purchase program well before raising interest rates.

“We will reach the time at which we will taper asset purchases when we have made substantial further progress towards our goals from last December,” Powell said.

He added, “That would in all likelihood be before, well before, the time we would consider raising interest rates. We have not voted on that order but that is the sense of the guidance.”

Meanwhile, the Fed released its Beige Book, which noted economic activity in the U.S. accelerated to a moderate pace from late February to early April.

The release of the Beige Book comes two weeks ahead of the Federal Reserve’s next monetary policy meeting, which is scheduled for April 27-28.

In other U.S. economic news, the Labor Department released a report showing another notable increase by import prices in the month of March.

Sector News

Gold stocks came under pressure over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 1.5 percent.

The weakness among gold stocks came amid a decrease by the price of the precious metal, as gold for June delivery slid $11.30 to $1,736.30 an ounce.

Semiconductor and software stocks also showed notable moves to the downside, with the Philadelphia Semiconductor Index and the Dow Jones U.S. Software Index both falling by 1.2 percent.

On the other hand, substantial strength remained visible among energy stocks, which moved sharply higher along with the price of crude oil.

Crude for May delivery skyrocketed $2.97 to $63.15 a barrel following the release of a report showing a bigger than expected weekly drop in crude oil inventories.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 5.7 percent, the NYSE Arca Oil Index surged up by 3.2 percent and the NYSE Arca Natural Gas Index jumped by 2.2 percent.

Steel stocks also held on to strong gains, with the NYSE Arca Steel Index climbing by 3.1 percent to its best closing level in almost ten years.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Japan’s Nikkei 225 Index bucked the uptrend and fell by 0.4 percent. China’s Shanghai Composite Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index jumped by 1.4 percent.

Most European stocks also moved to the upside on the day. The U.K.’s FTSE 100 Index advanced by 0.7 percent and the French CAC 40 Index rose by 0.4 percent, while the German DAX Index bucked the uptrend and dipped by 0.2 percent.

In the bond market, treasuries saw modest weakness after moving notably higher in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 1.638 percent.

Looking Ahead

Economic data may attract attention on Thursday, with traders likely to keep a close eye on reports on weekly jobless claims, retail sales and industrial production.

On the earnings front, Bank of America (BAC), Citigroup (C), Delta Air Lines (DAL) PepsiCo (PEP) and UnitedHealth (UNH) are among the companies due to report their quarterly results before the start of trading on Thursday.

Business News