Financial Market Recap - March 02, 2021

JL Matthews

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New York, NY - U.S. stock market indices closed lower on Tuesday, in a spate of profit-taking following Monday's rally.

The Nasdaq Composite, loaded with tech names, dropped 1.7% to 13,358.79; Dow Jones Industrial Average fell 143.99 points, or 0.5%; while the S&P 500 slid 0.8% to 3,870.29.

The tech and retail sectors led the way lower, while commodities and materials moved higher.

Tesla was down 4.5% to close at $686.44; Facebook fell 2.2%; Amazon lost 1.6%.

Target, which reported Q4 2020 earnings results Tuesday, fell by 6.8% to $173.49.

Despite reporting 118% growth in online sales and 500% growth in curbside pickup sales, investors were spooked by the company's lack of guidance for 2021.

Following the earnings release, Target CEO Brian Cornell spoke to CNBC.

"The range of outcomes are very uncertain when we think about the state of the economy, where the virus is, the distribution of vaccines. Everyone is wondering when we go back to work and back to school. So we think, right now, the prudent thing for us to do is really just focus on execution."

Meanwhile, Rocket Mortgage surged 71% on Tuesday, closing at $41.60.

The mortgage lender reported better-than-expected earnings last week.

Still, market watchers attributed the enormous gain to the same phenomenon which drove stocks such as Gamestop and AMC Entertainment higher in January.

Like many of the other 'Reddit' stocks, Rocket Mortgage is a heavily-shorted stock, with 46% of the float held short.

Notable stocks:

Microsoft lower 1.3% to $233.87

Caterpillar lower 1.8% to $215.82

Intel lower 2.6% to $61.24

American Express higher 0.4% to 139.25

Merck higher 0.7% to 72.85

Political

As markets continue to digest the impacts of an end to the global pandemic, encouraging news on vaccines continued.

In Washington, the Biden administration announced that it plans to have enough vaccine doses on hand to innoculate the U.S. adult population two months earlier than planned.

"We're now on track to have enough vaccine supply for every adult in America by the end of May," Biden said.

An initial estimate placed that goal at the end of July.

Earlier in the day, Merck announced that it would use two of its facilities to produce Johnson and Johnson's vaccine.

Rates

In Europe, comments from ECB board member Fabio Panetta hinted at further purchases of Eurozone bonds to keep yields low.

Following last week's surge in U.S. Treasury yields, rates have now steadied.

However, policymakers remain vigilant to the dangers of a rapid rise in interest rates.

Speaking at a Council of Foreign Relations event, Federal Reserve Governor Lael Brainard noted the climb in rates.

"Some of those moves last week and the speed of the moves caught my eye," Brainard said. "I would be concerned if I saw disorderly conditions or persistent tightening in financial conditions that could slow progress."

Brainard noted that if there is a jump in inflation, it is likely to be 'transitory'. That is to say, short-lived.

"Transitory inflation pressures are possible if there is a surge in demand that outstrips supply in certain sectors when the economy opens up fully."

Brainard's remarks are somewhat at odds with Federal Reserve Chairman Jerome Powell's comments, who last week noted that rising long-term rates would signal confidence in the U.S. economy.

The yield on the 10-year U.S. Treasury closed at 1.398%, a decrease in yield of roughly four basis points.

Commodities

Gold was higher, off its recent lows, as weakness in the U.S. Dollar drove the yellow metal higher.

Gold futures closed higher by 0.6% at $1,733.60.

Bitcoin dropped by 2.19% to $47,808.00 after an almost 7% surge on Monday.

U.S. crude futures were lower by 89 cents at $59.75 a barrel.

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JL Matthews is a writer with interests spanning history, humor, tv/film, parenting, and more. His work has appeared in numerous publications, and he is a 6x Top Writer on Medium. Follow him on News Break, Medium, and Twitter for updates and latest work.

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