U.S. stock indexes end slightly lower after wobbly day
U.S. stock indexes capped a day of wobbly trading with slight losses Tuesday, erasing some of their modest gains from a day earlier.
The market changed course several times during the day as investors balanced conflicting U.S. economic data and testimony from Federal Reserve Chairman Jerome Powell.
The Fed chief told Congress that the U.S. economy should keep expanding at a solid, though somewhat slower pace this year, and reassured markets that the central bank would be “patient” in raising interest rates.
Stocks got a boost following Powell’s remarks, though it faded toward the end of the day.
“Powell was the big news today,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “He didn’t really say anything new, but he didn’t say anything wrong.”
Health care, financial and industrial companies took some of the heaviest losses, offsetting gains in technology stocks and retailers. The S&P 500 dropped 2.21 points, or 0.1 percent, to 2,793.90. The benchmark index, which has finished higher the past four weeks in a row, broke a two-day winning streak.
The Dow Jones Industrial Average fell 33.97 points, or 0.1 percent, to 26,057.98. The Nasdaq composite slid 5.16 points, or 0.1 percent, to 7,549.30. The Russell 2000 index of smaller companies gave up 11.32 points, or 0.7 percent, to 1,577.48. Major European indexes finished mostly higher.
U.S stocks slipped in early trading after the government reported that the number of homes being built last month plunged to the lowest level in more than two years, the latest sign that the housing market is cooling. Homebuilders traded broadly lower following the report.
That downbeat housing report was countered by a subsequent survey from The Conference Board that shows consumers were far more confident last month than economists had expected. The increase in the index came after three months of declines.
Then the market got help from Powell, who told the Senate Banking Committee that the central bank is taking its time to decide when to change interest rates this year.
“When I say that we are going to be patient what that really means is that we are in no rush to make a judgment about changes in policy,” Powell told the panel. “We are going to be patient. We are going to allow the situation to evolve ... and allow the data to come in. And I think we are in a very good place to do that.”
It was Powell’s first appearance before Congress since the Fed signaled in December that it would hold off on raising interest rates. Powell said he expects solid, but slower growth in 2019 and warned of growing risks, including a global slowdown, volatile financial markets and uncertainty about U.S. trade policy.
Many private economists believe the Fed will keep rates unchanged until late this year and may not raise them at all. Powell was due to testify before the House Financial Services Committee on Wednesday.
Traders also had their eye on more corporate earnings reports.
A weak housing market helped slam the brakes on growth for home improvement retailer Home Depot. The stock slid 0.9 percent after a key sales measure fell short of Wall Street’s forecasts. The company also said it expects weak sales this year. Rival Lowe’s Cos. is due to report its quarterly results Wednesday.
The housing market initially cooled last year as average 30-year mortgage rates climbed to nearly 5 percent. Home prices have consistently risen faster than wages and the inventory of homes listed for $250,000 or less is tight, suggesting a sluggish market going forward.
Homebuilders also traded lower Tuesday. LGI Homes led the slide, dropping 4.5 percent.
Macy’s gained 1.5 percent after the company said it would trim its management structure in a move that could save it $100 million as it gears up for fiercer competition in the retail sector. The department store chain also surged past Wall Street’s profit forecast for the quarter.