Stocks fell in trading on Tuesday at the start of the FOMC’s two-day meeting and ahead of the statement and Fed Chair Janet Yellen’s press conference on Wednesday.
First, the scoreboard:
- Dow: 17,848.18, -129.24, (-0.72%)
- S&P: 500 2,074.53, -6.66, (-0.32%)
- Nasdaq: 4,936.34, +6.83, (0.14%)
And now, the top stories on Tuesday:
- Housing starts crumbled in February, falling 17% to an annualized pace of 987,000, missing the expectation for a 2.4% decline to a pace of 1.04 million from January. Building permits beat estimates, rising 3% to a pace of 1.092 million. “The collapse is strikingly similar to the 13% ski-drop in housing starts in January 2014 during the polar vortex where winter’s icy cold brought construction to a standstill,” wrote Bank of Tokyo-Mitsubishi’s Chris Rupkey.
- Nintendo shares surged by as much as 29% after the company announced it will start making games for mobile devices. The Japanese manufacturer of the Wii U and 3DS consoles has entered a partnership with mobile gaming company DeNa; both companies invested about $US181 million in each other, Reuters reported.
- Weight Watchers was downgraded to”Underperform” from “Neutral” by Credit Suisse. In a note, analysts wrote that the company’s membership growth is being challenged by the abundance of fitness apps and devices that cost a one-time fee, versus the monthly commitment required for Weight Watchers. Shares fell by as much as 4% in trading. Active membership declined 15% to about 2.5 million people in the fourth quarter, the company said in its earnings release.
- Analysts at Stifel say concerns around Alibaba’s merchandise of fake goods have died down. Stifel upgraded the stock to “Buy” from “Hold.” “Regulatory risks surrounding counterfeit items appear to have subsided, for now,” the analysts wrote. “We reduce our estimates to reflect additional conservatism beyond our initial assessment.” The 180-day lockup period on shares ends on Wednesday, and large investors will be able to dump the stock.
- American Airlines shares climbed by as much as 6%, following the announcement that it will join the S&P 500 after the close of trading March 20. It will replace Allergen, whose takeover by Actavis is expected to be completed Tuesday.
- US companies have stashed a record $US2.1 trillion in cash abroad, and the growth rate of that pile is slowing down, according to Credit Suisse. The US is one of only a few countries with a global tax system, meaning that all earnings are taxable once they are returned home. This incentivizes companies to leave foreign earnings abroad.