Day Traders Diary
The major averages sold off into the close as traders wrap up a rocky first quarter for Wall Street.The Dow Jones Industrial Average slipped 550 points, or 1.5%. The S&P 500 dropped 72 points or 1.5% while the Nasdaq Composite dropped 221 points or 1.5%.
Semiconductor and tech hardware stocks came under pressure Thursday amid analyst concerns over the PC market going forward. AMD shares slid more than 7% after analysts at Barclays downgraded the stock to equal weight from overweight. Meanwhile, HP Inc and Dell dipped 5.2% and 5.5%, respectively, after being downgraded to equal weight from overweight at Morgan Stanley.
Shares of Walgreens Boots Alliance dropped 5%, weighing on the Dow. The pharmacy chain beat estimates for its fiscal second quarter, though that was due in part to demand for pandemic-related products.
Bank stocks were another area of weakness, with JPMorgan Chase dropping 2.3% and Goldman Sachs shedding more than 1%.
Thursday marks the last trading day of March and of the first quarter. Stocks have rallied in the second half of the month, with the S&P 500 and Nasdaq on pace to finish the month up about 5% each and the Dow up nearly 4%.
However, for the first quarter, the Dow and S&P 500 are both down about 3%, and the Nasdaq is off more than 7%. For all three averages, this will be the first negative quarter since the first quarter of 2020, which marked the start of the Covid pandemic in the U.S.
On the data front, core PCE prices, a key inflation measure watched by the Fed, came in at 5.4% growth year over year for February. That was just below the expectations of 5.5%.
Oil prices fell, with West Texas Intermediate futures dropping more than 6% to around $100 per barrel. That comes as President Joe Biden's administration announced a plan to release 1 million barrels of oil per day from the strategic petroleum reserve for about six months.
Volatile oil prices have loomed over equities, with U.S. crude prices climbing more than 3% on Wednesday. Germany warned of potential rationing of natural gas due to disputes with Russia, and U.S. crude stockpiles fell.
In Ukraine, Russian forces continued to hold their positions around Kyiv and shell the capital city, according to UK intelligence officials. Russia president Vladimir Putin said payments for Russian natural gas will need to be made in rubles, Reuters reported, further complicating energy supply issues for Europe.
Elsewhere, weekly jobless claims came in at 202,000. Economists surveyed by Dow Jones were expecting 196,000. Personal income rose 0.5%, meeting expectations, while consumer spending rose less than expected.
The data releases came ahead of the closely followed monthly jobs report from the Labor Department. The report for March will be released before the opening bell on Friday.
The cruise industry is finally getting some good news. The CDC removed its travel health notice for cruise ships for the first time since March 2020. Carnival (CCL), the world's largest cruise company, is up 3% has they have 66 ships currently in service, but anticipate it will have all 94 of its vessels sailing by June. Just not to Russia.
Profit-taking in Walgreens (WBA). The drugstore retailer is down 5% following earnings. The company easily beat expectations due to Covid-19 vaccinations and testing along with sales for cough, cold, and flu remedies. However, looking forward, Walgreens could see a significant drop in sales and earnings the second half of the year and into 2023 as vaccinations slow.
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