Dow Drops Amid Soft Underlying Durable Goods
NEW YORK ( TheStreet) -- Markets dropped Wednesday as the latest headlines on durable goods orders ultimately failed to generate enthusiasm about U.S. manufacturing conditions.
Still, health care stocks were a bright spot, rising after biotechs were hard-hit earlier this week.
- The Dow Jones Industrial Average lost 0.6% to 16,268.99, while the S&P 500 dropped 0.7% to 1,852.56. The Nasdaq fell 1.43% to 4,173.58.
- U.S. durable goods orders increased by a more-than-expected 2.2% in February. Economists were expecting a 1% rebound. Still, the report came with soft underlying data.
- "The headline increase in durable orders in February reflects a strong rebound in transportation orders after significant weakness at the end of 2013 and the start of 2014," Sterne Agee chief economist Lindsey Piegza said in a note. "However, transportation aside, demand remains tepid with businesses still clearly sidelined in terms of investment."
- The March Markit PMI Services Flash showed U.S. private sector economic activity accelerating at a faster rate then February, with the index hitting 55.8 from 54.1 a month earlier.
- International markets were broadly higher as stimulus chatter flowed out of Europe and China, with the DAX in Germany finishing ahead by 1.18% and the FTSE 100 up 0.01% after trading well into positive territory for most of the day. The Hong Kong Hang Seng settled up 0.72%, and the Nikkei 225 in Japan closed up 0.37%.
- European Central Bank governing council member and Bundesbank head, Jens Weidmann, said Wednesday that negative interest rates are being considered to help cool down the euro and that quantitative easing proposals were also being discussed amid the fight against deflationary pressures. China stimulus talk was heating up after the approval of five railway projects by China's main economic planning agency.
- Top gainers in the S&P included Tenet Healthcare
, Quest Diagnostics (up more than 5%) and PVH , which gained 3.5%. PVH announced earnings of $1.43 a share in the fourth quarter, higher than earlier projections of $1.40. The health care theme was also prevalent in the Dow, with Merck , Pfizer and UnitedHealth Group the top gainers.
advanced 1.9% as it gets ready to repurchase up to 1.89% of its shares, worth as much as $3.5 billion.
- King Digital
saw shares slide 15.6% to $19 on their first day of trading on the New York Stock Exchange after pricing its IPO of 22.2 million shares at $22.50 a share. It raised close to $500 million.
shed 6.6% after buying headset maker Oculus VR for $2 billion.
- President Obama's speech in Brussels was followed by a reassertion by the U.S. president and EU leaders that they continue to cooperate to isolate Russia with the threat of economic sanctions, especially from the energy route. The president also discussed Wednesday with European and North Atlantic Treaty Organization leaders about strengthening their military presence in Eastern and Central European regions situated near Russia amid its annexation of Crimea.
-- By Jane Searle, Andrea Tse and Joe Deaux in New York