By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Durable-goods orders drop in February; Kraft, Kofex up on
M&A news
NEW YORK (MarketWatch) -- U.S. stocks fell on Wednesday,
declining for the third straight session, as a selloff in
technology and biotech stocks pushed indexes lower.
The S&P 500 (SPX) lost 19.06 points, or 0.9%, to 2,072.44.
Technology stocks were hit hard, with the largest company on the
index, Apple Inc. dropping more than 1%.
The Dow Jones Industrial Average (DJI) shed more than 200 points
to trade at 17,804.15 in recent action, turning negative for the
year. The Nasdaq Composite (RIXF) fell the most, dropping nearly 88
points, or 1.8%, to 4,906.81. Biotechnology stocks sold off, with
the iShares Nasdaq Biotechnology ETF (IBB) dropping 3.5%.
John Manley, chief equity strategist at Wells Fargo Advantage
Funds, attributed the selling action to the jitters stemming from
uncertainty about the Fed policy and expectations that earnings
would be poor.
"We are in the pre-announcement period, when companies will
begin issuing warnings ahead of the earnings season and many
investors expect that the first-quarter earnings will be poor.
Typically, high-multiple stocks, such as biotechs and technology
stocks get clipped badly during such times," Manley said.
"There are also concerns that the Fed might be tightening too
soon, given very weak growth we are experiencing," Manley said.
Released ahead of the bell, orders for durable U.S. goods
(http://www.marketwatch.com/story/february-durable-goods-orders-drop-14-in-weak-report-all-around-2015-03-25)
fell by more than expected in February, suggesting businesses
remain reluctant to invest more aggressively.
Dan Greenhaus, chief global strategist at BTIG, said the market
is still digesting economic reports in the wake of a Federal
Reserve that said it would be "data dependent" in determining the
pace of its first rate hike in nine years.
"Today's durable-goods orders were in line with poor data of
late, which suggest that the first-quarter GDP will be weak,"
Greenhaus said.
Charles Evans, president of the Chicago Federal Reserve,
speaking to press after a speech in London, warned that global
uncertainty is the biggest risk to the U.S. economy, advocating
interest rates stay low until 2016.
The dollar (DXY) shifted slightly lower Wednesday after data
showed German business confidence rose in March
(http://www.marketwatch.com/story/ifo-german-business-confidence-rises-again-2015-03-25)
for the fifth straight month, hitting its highest level since July
2014.
Stocks to Watch: Shares of Kraft Foods Group Inc.(KRFT) surged
more than 35% i after a merger was announced with H.J. Heinz
Company
(http://www.marketwatch.com/story/kraft-and-heinz-to-merge-in-deal-to-create-company-with-revenue-of-28-billion-2015-03-25).
Shares of Kofax Ltd.(KFX) were up 46% after the software company
agreed to be acquired by Lexmark International (LXK) late
Tuesday.
For more on notable movers, read Movers & Shakers column
(http://www.marketwatch.com/story/red-hat-apollo-education-pvh-earnings-in-focus-2015-03-24).
Other markets: European stocks ended lower. In Asia, the
Shanghai Composite Index snapped a 10-day winning streak, and the
Japan Nikkei 225 index edged up 0.2%.
Oil prices (CLK5) headed higher after briefly paring gains
(http://www.marketwatch.com/story/oil-futures-choppy-ahead-of-us-crude-stockpile-data-2015-03-25)
on weekly data showing another rise in U.S. crude stockpiles. Gold
prices (GCK5) were moderately higher.
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