Market Wrap: Stronger Dollar Sends Stocks Down
By Rodrigo Campos
NEW YORK -- U.S. stocks fell on Thursday as a stronger dollar weighed on oil and other commodity prices, sending energy and materials sectors lower.
The greenback rose after a sharp decline on Wednesday. The Federal Reserve appeared to be more dovish than expected even as it opened the door for a Fed funds rate hike as soon as in June. U.S. stocks rose more than 1 percent on Wednesday after the Fed statement.
"The forward path in interest rates is going to be slower than previously expected. The market celebrated that yesterday, and now it's wondering what comes next," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.
Initial jobless claims rose marginally last week, indicating the labor market remained on solid footing. Growth has slowed in the first quarter, hurt in part by a harsh winter and a strong dollar, but many analysts see a positive outlook for the second quarter. "The economy seems to be doing better and that could be providing some support for the dollar," said Caron, noting the Fed's tightening path was not the only tailwind for the U.S. currency.
Situation Across Industry Sectors
WTI crude fell 1.9 percent and Brent fell 2.6 percent as the dollar strengthened, and on concerns over excess supply. The S&P 500 (^GSPC) energy index fell 1.7 percent.
The Dow Jones industrial average (^DJI) fell 117.16 points, or 0.65 percent, to 17,959.03, the S&P 500 lost 10.23 points, or 0.49 percent, to 2,089.27 and the Nasdaq composite (^IXIC) added 9.55 points, or 0.19 percent, to 4,992.38. Exxon Mobil (XOM) and Chevron (CVX) were among the biggest decliners in the Dow. Each lost about 2 percent. The Dow welcomed its newest member, Apple (AAPL), on Thursday. The iPhone maker took the place of AT&T (T).
Biotech stocks helped buoy the Nasdaq composite and the S&P 500's healthcare sector. Regeneron (REGN) added 2.9 percent to $486.02 and Biogen (BIIB) rose 1.3 percent to $433.65 after Credit Suisse upped its price target on the stock to $500 from $400. The Nasdaq biotech index rose 1.9 percent.
Guess (GES) shares surged 16 percent to $19.42. Quarterly profit beat analyst estimates as the apparel retailer's expenses declined and online business grew.
About 6.2 billion shares changed hands in U.S. exchanges, below the 6.67 billion daily average so far this month. Declining issues outnumbered advancing ones on the NYSE by 1,969 to 1,071, for a 1.84-to-1 ratio; on the Nasdaq, 1,441 issues rose and 1,288 fell, for a 1.12-to-1 ratio favoring advancers. The S&P 500 posted 36 new 52-week highs and 3 new lows; on the Nasdaq composite there were 149 new highs and 28 new lows.
The Associated Press contributed to this article.
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