Stocks falling, production data available

US stocks fell Wednesday morning to start March ahead of key manufacturing data.

The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) fell 0.3%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) were approaching the flatline.

Stocks pointed to a recovery Wednesday morning after better-than-expected manufacturing and services activity in China in February signaled the country’s “rapid near-term recovery,” said Andrew Tyler, head of the US Market Intelligence team at JP Morgan.

The yield on the benchmark 10-year US Treasury Note rose to 3.96% on Wednesday morning. Crude oil was trading weaker, with the US benchmark WTI falling at $76.56 a barrel.

On the US economic data side, Wall Street is awaiting manufacturing data Wednesday morning, which could reveal more about the impact of monetary policy tightening.

Shares fell on Tuesday, rounding out the last day of a volatile February on Wall Street. According to JP Morgan’s trading desk, the month-end rebalancing in February brought some weakness in equities and strength in bonds Tuesday afternoon. In addition, Goldman Sachs (GS) investor day saw a 3.8% sell-off for the stock as the bank considers alternatives to its struggling consumer platform business.

“Following the recent strategic missteps, this update is clearly more evolution than revolution,” JPM financial sector specialist James Goulbourne wrote in a note Tuesday, “with profitability in the supporting Platform Solutions business, rather than deeper cost savings in the core business (which is driving the market really wild), coupled with decreasing exposure to the balance sheet, returns are expected to increase.”

With February in mind, the S&P 500 is now up 3.4% this year, according to data from Bespoke Investment Group. Mega caps have been a huge driver of index movements. That said, 20 of the largest stocks in the S&P 500 accounted for most of the index’s gains.

With the calendar turning, March historically sees the S&P 500 gain in the second half of the month, Bespoke Investment Group noted.

The path of the Federal Reserve’s rate hikes remains in the crosshairs of investors. In his first public address since taking office last month, Austan Goolsbee, president of the Chicago Fed, said on Tuesday that it would be “a danger and a mistake for policymakers to rely too heavily on market responses” and stressed the importance of complement traditional data with field observations from the real economy.”

However, Goolsbee, who will be a voter at this year’s policy-making meeting of the Federal Open Market Committee, did not comment on monetary policy.

Since last year, the Fed has raised interest rates sharply to cool inflation. But inflation remains sticky. Policymakers will release new forecasts after the March 21-22 central bank meeting.

Austan Goolsbee. REUTERS/Brendan McDermid

On the housing front, mortgage rates are rising, pushing buyers to the sidelines as the spring housing market gets underway. According to the Mortgage Bankers Association’s seasonally adjusted index, both purchase and refinance applications fell last week. The number of purchase applications reached its lowest point in 28 years, down 44% from a year ago.

Here are some of the trending tickers on Yahoo Finance today:

  • Eli Lilly and company (LLY): Shares of the drugmaker rose Wednesday morning as it expects to limit out-of-pocket costs his insulin for $35 a month. The plan comes as a pledge to provide critical help for some people with diabetes, who sometimes face increased medical costs.

  • from Kohl (KSS): Shares of the retail giant fell 1% Wednesday morning after the company posted a surprise fourth-quarter loss and sales slipped as consumer habits diverged from discretionary spending.

  • Wendy’s (WEN): The fast food chain announced in its quarterly results that it plans to grow sales through 2025 as it streamlines costs.

  • Rivian (RIVN): The electric truck maker’s guidance for FY 2023 deliveries was 20% below estimates as the electric vehicle maker struggles to scale up its production of trucks, vans and SUVs.

  • nio (NIO): Another EV maker gave weak sales expectations, the Chinese premium EV startup, reported a much worse-than-expected fourth-quarter loss as margins took a hit, in part due to the “losses on purchase commitments.” The stock fell 3% on Wednesday.

  • HP (HPQ): The PC and printing giant’s stock tumbled after the company published mixed results in an environment of weak demand for personal computers. Sales in the fiscal quarter were down 18% year-over-year. Printer sales were down 5% from a year ago.

  • Lowe’s (LOW): The home improvement company reported weaker fiscal fourth quarter sales and released a conservative outlook, with comparable store sales expected to remain flat to 2% lower than last year.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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