By Anora Mahmudova and Sara Sjolin, MarketWatch
Bullard says markets could have a new "tantrum"
NEW YORK (MarketWatch) -- U.S. stocks erased modest gains in the
last 15 minutes of trading, finishing slightly lower on Monday.
Some market watchers attributed the downdraft in the last few
minutes of trading to the euro's roughly 1% rise against the dollar
on Monday.
Despite the reversal, Monday's moves were fairly tepid compared
with volatile swings last week, when the Federal Reserve signaled
that the first interest-rate hikes
(http://www.marketwatch.com/story/fed-takes-step-to-rate-hike-but-scales-back-intended-pace-2015-03-18)
may come as soon as June.
Even though the central bank dropped its reference to being
"patient", markets took the statement and the following news
conference by Chairwoman Janet Yellen as dovish.
The S&P 500 (SPX) ended the session 3.68 points, or 0.2%,
lower at 2,104.42, with four out of its main 10 sectors closing
lower.
The Dow Jones Industrial Average (DJI) finished 11.61 points, or
0.1%, lower at 18,116.04, with more than half of its 30 components
ending with losses.
The Nasdaq Composite (RIXF) closed 15.44 points, or 0.3%, lower
at 5,010.97, as biotechnology stocks led the losses. The iShares
Nasdaq Biotechnology ETF (IBB) fell 2.3%.
Arthur Hogan, chief market strategist at Wunderlich Securities,
said the Fed put the markets on data watch.
"Investors will be focusing on economic data, especially the PCE
component of the fourth-quarter GDP revision this week, as the Fed
made it clear it would remain flexible and data-dependent," Hogan
said.
"Markets are also using the break in the dollar surge as a
spring board. While ultimately stronger dollar is good for the U.S.
economy, a sharp gain in a short time had been disruptive for
markets," Hogan added.
Fed speakers: Monetary policy still was in the spotlight, with
St. Louis Federal Reserve President James Bullard telling CNBC
Monday that the dovish statement from last week may have misplaced
investor expectations about the first rate hike. Bullard also said
the market could throw another "tantrum"
(http://www.cnbc.com/id/102525889) with the Fed possibly raising
rates later this year.
Cleveland Fed President Loretta Mester was speaking in Paris
Monday morning. Mester, who isn't a voting member of the
policy-setting committee this year, said the central bank can do
more
(http://blogs.wsj.com/economics/2015/03/23/feds-mester-fed-needs-further-refinements-of-forward-guidance/?KEYWORDS=mester)
at helping guide the market in terms of rate moves.
Fed Vice Chair Stanley Fischer speaking at the Economic Club of
New York
(http://www.marketwatch.com/story/feds-fischer-voices-no-complaints-about-euro-weakness-2015-03-23),
said rate hike is likely to be warranted this year.
Economic data: Monday's sole economic report was on sales of
existing homes, which rose 1.2% in February to a seasonally
adjusted annual rate of 4.88 million, the National Association of
Realtors reported Monday. The gain was below expectations. The
median sales price of used homes hit $202,600 in February, up 7.5%
from the year-earlier period.
Stocks to watch: Shares of Carnival Corp.(CCL) fell 1.8% after
Deutsche Bank cut the cruise-operator to hold from buy.
Tenet Healthcare Corp.(THC) gained 4.9% on news the company is
creating a $2.6 billion joint venture
(http://www.marketwatch.com/story/tenet-healthcare-to-create-26-bln-joint-venture-with-united-surgical-2015-03-23)
with United Surgical Partners International.
Gilead Sciences Inc.(GILD) dropped 2% after the drug maker on
Friday warned health-care providers
(http://www.bloomberg.com/news/articles/2015-03-21/gilead-warns-after-hepatitis-patient-on-heart-drug-dies)
that nine patients taking its hepatitis C drugs Harvoni or Sovaldi
along with the heart treatment amiodarone developed abnormally slow
heart beats and one died of a heart attack, according to
Bloomberg.
Shares of Kansas City Southern (KSU) dropped 8%, after the
railroad company lowered its 2015 sales growth outlook.
For more on notable movers read Movers & Shakers column
(http://www.marketwatch.com/story/tenet-climbs-after-deal-news-carnival-slides-on-broker-downgrade-2015-03-23).
Other markets: Weaker dollar (DXY) pushed up commodity prices on
Monday. Crude oil (CLK5) prices settled at the highest level in
almost two weeks, adding 1.9% to $47.45 a barrel.
Gold futures (GCK5) finished higher for a fourth straight
session, settling 0.3% higher at $1,187.70.
Also read: Gold and oil have a complicated relationship with the
dollar
(http://www.marketwatch.com/story/gold-and-oil-have-a-complicated-relationship-with-the-dollar-2015-03-23)
Stock markets in Europe
(http://www.marketwatch.com/storyno-meta-for-guid) declined, with
investors waiting for the latest developments in Greece's reform
negotiations. Greek Prime Minister Alexis Tsipras is scheduled to
meet German Chancellor Angela Merkel later on Monday.
Asian markets closed mostly higher
(http://www.marketwatch.com/storyno-meta-for-guid).
Subscribe to WSJ: http://online.wsj.com?mod=djnwires