MARKET SNAPSHOT
Weakness in the tech sector pulled U.S. stocks lower. Treasury yields declined slightly, following a modest downward revision to fourth-quarter U.S. economic growth. U.S. oil prices fell after data showed U.S. inventories grew more than expected. Gold edged lower as the dollar gained ground.
MARKET WRAPS
EQUITIES
The artificial-intelligence mania that fueled the stock market to record highs this year took a breather, pushing all three indexes lower.
The technology-heavy Nasdaq Composite led losses among the three major indexes, down 0.5%. The Dow Jones Industrial Average fell 0.1%, and the benchmark S&P 500 declined 0.2%.
The pause in the rally came as investors awaited fresh data for an inflation gauge due Thursday. Recent figures for the consumer price index came in higher than expected by economists, causing some traders to wonder if the Federal Reserve will have to hold rates higher for longer.
"Coming into this year, a lot of people thought the Fed would be cutting pretty quickly and often," said Chris Zaccarelli, chief investment office at Independent Advisor Alliance. "You got one data point, which made people start worrying about inflation again."
Earlier Wednesday, Chinese shares closed lower on likely profit-taking. Investors are looking to China's National People's Congress starting next week. Investors will watch for Beijing's fiscal stance in 2024, updates on property-sector policy and plans for stimulating consumption, Deutsche Bank said.
The benchmark Shanghai Composite Index ended 1.9% lower, the Shenzhen Composite Index dropped 3.8% while the ChiNext Price Index shed 2.5%. Hong Kong's Hang Seng Index fell 1.5%.
Japan's Nikkei Stock Average slipped 0.1%, dragged lower by electronics stocks, amid profit-taking following the benchmark index's ascent to record highs for the previous three sessions.
Australia's S&P/ASX 200 closed flat, fading from a bright start after data showed annual inflation stayed steady in January.
New Zealand's NZX-50 gained 0.6%, moving into positive territory for this week after the country's central bank opted against raising interest rates.
COMMODITIES
U.S. oil futures ended lower for the first time in three sessions, pressured by government data showing a fifth consecutive weekly climb in domestic commercial-crude inventories.
However, Brent's front-month contract edged up to settle at the highest level since November. A report said major oil producers in OPEC+ may consider extending their voluntary production cuts into the second quarter and analysts pointed out signs of tighter global supplies, likely providing some support to the market.
West Texas Intermediate crude for April delivery fell 0.4% to settle at $78.54 a barrel on the New York Mercantile Exchange. April Brent crude ended nearly flat ahead of Thursday's expiration, at $83.68 a barrel on ICE Futures Europe.
"Crude stocks built once again as refinery runs continue to hold well below year-ago levels amid both planned and unplanned maintenance" and as the outage at BP's Whiting, Ind., refinery drags on, said Troy Vincent, senior market analyst at DTN.
Front month Comex gold for March delivery lost nearly 0.1% to settle at $2033.00 per troy ounce.
TODAY'S TOP HEADLINES
Fed's Williams said he's 'very focused' on getting inflation back to target
Like a lunar rocket, inflation has shot up and come back down but has yet to land safely, New York Fed President John Williams said Wednesday.
"While we've seen great progress toward achieving our goals, the journey is not yet over, and I am very focused on making sure we complete this mission successfully," Williams said in a speech at an aviation museum on Long Island.
"We still have a ways to go on the journey to sustained 2% inflation," he added.
U.S. economy's fourth-quarter growth rate downgraded to 3.2%, GDP shows. Still very strong.
The growth rate of the U.S. economy in the fourth quarter was downgraded slightly to a 3.2% annual pace, but the economy is still expanding at a rapid clip and showing few signs of slowing down.
Originally the government said gross domestic product had expanded at a 3.3% rate in the final three months of 2023. The figure is adjusted for inflation.
The increase in fourth-quarter GDP followed an even stronger 4.9% gain in the third quarter. The economy does not appear to have lost a step early in the new year, either.
Salesforce's disappointing guidance overshadows earnings beat, stock slips 4%
Salesforce Inc.'s stock initially slipped 4% in after-hours trading Wednesday after the company racked up revenue and earnings that topped analysts' estimates. It also provided updates on its recently released Einstein artificial-intelligence platform and on its cost-cutting moves.
The company also disclosed a dividend of 40 cents and a $10 billion stock buyback program. But a light fiscal 2025 revenue guidance was dinging Salesforce shares.
"We're thrilled to initiate our first-ever Salesforce dividend and increase our share buyback plan by $10 billion," Salesforce Chief Executive Marc Benioff said in a statement announcing the results.
HP meets estimates and sees PC market stabilizing in 2024, but stock still falls
HP Inc.'s stock fell 4% in extended trading Wednesday after the computing giant reported results that aligned with Wall Street's estimates.
"There are signs of a slowdown in revenue decline, as we saw the PC market stabilizing in 2024" HP Chief Executive Enrique Lores said in an interview. He said HP will provide more details on its AI PCs, due in the second half of the year, during a reseller event next week. Executives from Microsoft Corp. MSFT, Alphabet Inc.'s GOOGL GOOG Google, and Nvidia Corp. NVDA are scheduled to attend.
The Silicon Valley giant HPQ reported fiscal first-quarter net earnings of $622 million, or 62 cents a share, compared with net earnings of $469 million, or 47 cents a share, in the year-ago quarter. Adjusted earnings were 81 cents a share.
Electronic Arts to Slash About 5% of Workforce
Electronic Arts plans to cut about 5% of its workforce in a restructuring as it looks to reduce its real-estate footprint and modify its portfolio.
The videogame maker said in a regulatory filing Wednesday that the restructuring reflects actions driven by portfolio rationalization, including costs linked to licensing agreements and paring down real-estate and head count.
The company expects to incur about $125 million to $165 million in charges connected to the plan. Those charges include $50 million to $65 million in office-space reductions and $40 million to $55 million in severance and other employee-related costs.
Expected Major Events for Thursday
00:00/NZ: Feb ANZ Business Outlook
00:30/AUS: 4Q Private New Capital Expenditure & Expected Expenditure
00:30/AUS: Jan Financial Aggregates, incl Private Sector Credit
00:30/AUS: Jan Retail Trade
01:00/JPN: Jan Steel Imports & Exports Statistics
01:30/CHN: Annual National Bureau of Statistics of China annual statistical communique
02:00/SIN: Jan Money Supply
02:00/SIN: Jan Bank Loans
03:00/SKA: Jan New deposit, loan rates
04:30/JPN: Jan Preliminary Report on Petroleum Statistics
05:00/JPN: Jan Construction Orders
05:00/JPN: Jan Housing Starts
05:30/AUS: Jan International Reserves & Foreign Currency Liquidity
07:00/THA: Jan Industrial Production Index
07:00/MAL: Jan Money Supply
08:00/TAI: Jan Employment / Unemployment
08:00/TAI: Jan Industrial output
08:15/HK: Jan Money Supply
08:30/TAI: 4Q Revised GDP
09:59/PHI: Jan Money Supply (M3)
09:59/HK: Jan Tourism figures
21:45/NZ: Jan Building Consents Issued
22:00/AUS: Feb Australia Manufacturing PMI
23:30/JPN: Jan Labour Force Survey
00:00/SKA: Feb Trade data
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
February 28, 2024 17:02 ET (22:02 GMT)
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