US stocks closed modestly lower a day after Tuesday’s selloff, while the euro extended its decline versus the dollar to record lows.
First, the scoreboard:
- Dow: 17,635.64 -27.30 (-0.15%)
- S&P 500: 2,040.27 -3.89 (-0.19%)
Nasdaq: 4,849.94 -9.85 (-0.20%)
And now, the top stories on Wednesday:
- Stocks traded in a narrow range today after the S&P 500 fell 1.7% on Tuesday and effectively wiped away all the year’s gains. New York Stock Exchange floor manager Rich Barry notes that some traders are stoked about this, because there’s a parallel between this year and 2014 when the S&P 500 rallied 11%: Stocks fell in January, rose in February, and sank early in March. “Keeping it positive down here folks,” he wrote.
- But Deutsche Bank’s David Bianco says the S&P could tank by as much as 9% before the sell off is over, given the increasing likelihood that the Federal Reserve will raise rates sooner than later.
- Meanwhile, the dollar continued its relentless rally and the euro touched a new 12-year low. The euro fell to as low as $US1.0512 versus the dollar, and is down about 12% this year. The European Central Bank’s asset purchase program that started on Monday is putting pressure on the euro, as demand for the dollar increases with interest rate hikes in view.
- Concerns about deflation are overblown. That’s according to Deutsche Bank’s Torsten Sløk, who points out that no G-20 countries are currently experiencing deflation, and in fact, the weakening euro (partly of the ECB’s policy) will eventually create inflation. One of the reasons for the ECB’s monetary policy easing is to combat deflation. Many other countries have cut interest rates in the last few months for the same reason.
- Pharmaceutical firm Endo is offering $US175 per share in cash to acquire Salix, the company that was in talks to be bought by Valeant, Bloomberg reported. Valeant had partnered with hedge fund manager Bill Ackman to acquire Allergen, but that deal also fell through when it was instead sold to Actavis in a $US66 billion deal. So, this could be a second deal loss for Ackman. Just last month, Valeant secured financing to make a bid for Salix at above or around $US150 a share.
- The Energy Information Administration reported that US oil inventories increased yet again last week, by 4.5 million to 448.9 million barrels, the highest for this time of the year in at least 80 years. Near the stock market close, West Texas Intermediate Crude oil was little changed around $US48.28 a barrel.
- Reuters reported that SoulCycle is considering going public. The indoor-cycling company charges around $US34 for a 45-minute spin session. It is partnering with Goldman Sachs to consider its options for the IPO, Reuters reported, citing sources familiar with the talks.
Business Insider Emails & Alerts
Site highlights each day to your inbox.