By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
Goldman analysts: It has been a period of 'indigestion'
NEW YORK (MarketWatch)--U.S. stocks switched between small gains
and losses Wednesday, catching their breath one day after a dollar
surge and growing expectations of a rate hike helped trigger the
Dow's biggest point drop in five months.
The S&P 500 (SPX) inched higher by less than 0.1% in
midafternoon action, with six of its 10 main sectors trading in
positive territory. The Dow Jones Industrial Average (DJI) edged
higher by 13 points, or less than 0.1%, with half of its 30
components trading lower. The Nasdaq Composite (RIXF) was
marginally down about 0.1%.
Tuesday's steep losses
(http://www.marketwatch.com/story/us-stocks-futures-drop-as-dollar-surges-apple-in-focus-2015-03-10)
erased year-to-date gains for the S&P 500 and the Dow
industrials. The two indexes are still negative for the year, while
the tech-heavy Nasdaq is up.
Some analysts have suggested the market should be calming
down.
Goldman Sachs analysts Noah Weisberger and Aleksandar Timcenko
said "winds have shifted with a looming U.S. tightening as the
current source of market disquiet." But they think the tightening
"will ultimately prove benign, though perhaps after some period of
'indigestion,'" the analysts said in a note Tuesday.
See: Here's what stocks do in the months just before a rate hike
(http://www.marketwatch.com/story/heres-what-stocks-do-in-the-months-just-before-a-rate-hike-2015-03-06).
"The reality is that the market will never be fully ready for
[a] hike in the interest rate," said Naeem Aslam, chief market
analyst at AvaTrade, in a note Wednesday. Investors are used to
"cheap money," and they "are not going to be happy if you pull that
plug," so Federal Reserve Chairwoman Janet Yellen "will just have
to be strong armed and pull the plug," he said.
Wednesday's muted action came even as the dollar continued to
push higher against rivals, with the euro (EURUSD) trading at a
nearly 12-year low.
Read more: The blistering pace of the dollar's rally is rattling
markets
(http://www.marketwatch.com/story/the-blistering-pace-of-dollars-rally-is-rattling-markets-2015-03-10)
Individual movers & shakers:SanDisk Corp.(SNDK) was one of
the S&P 500's biggest gainers, boosted by Goldman Sachs
analysts adding the stock to their so-called conviction buy
list.
Avon Products Inc.(AVP) was among the S&P's largest
decliners as investors fretted that a strong dollar will hurt the
company, which gets about 85% of its sales from overseas.
Read more about Wednesday's jumpiest stocks in Movers &
Shakers ()
Other markets: Gold (GCJ5) fell further
(http://www.marketwatch.com/story/gold-bounces-back-from-november-lows-2015-03-11)
as the dollar (DXY)charged ahead
(http://www.marketwatch.com/story/dollar-up-after-losing-a-chunk-of-gains-overnight-2015-03-11).
Oil prices
(http://www.marketwatch.com/story/oil-futures-rebound-ahead-of-us-oil-stockpile-data-2015-03-11)(CLJ5)
also dropped.
European stocks climbed
(http://www.marketwatch.com/story/european-stocks-rally-as-weaker-euro-fuels-exporters-2015-03-11),
aided by the falling euro as the European Central Bank's
bond-buying program continued. In Asia, Hong Kong equities dropped
to a two-month low
(http://www.marketwatch.com/story/hong-kong-stocks-fall-to-two-month-low-on-weak-china-data-2015-03-11)
after more signs of weakness in the Chinese economy, though
Japanese stocks rebounded.
Anora Mahmudova in New York contributed to this article.
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