April 3rd 2014 – Dow and S&P Retreat From New Highs

My Market View:

Another tough day for the Nasdaq.  I expect a bounce back tomorrow.  I am frankly baffled why tech and bio tech stocks are so volatile compared to the rest of the market right now.

However a regression to the mean will happen and I think that the technology heavy exchange will rebound a little from these steep declines very soon.

Tomorrow’s jobs report is not as important as it has been in the past considering Janet Yellen’s positive supporting comments on Monday, however, a chink of growth in the labour market would help boost stocks to a new high.

Market News:

Stocks spiralled lower Thursday, with the Dow and S&P 500 retreating from their all-time highs, dragged by declines in momentum and biotech stocks.

Momentum stocks including Tesla, Netflix and Priceline traded in the red as investors took profits from recent gains. The Nasdaq fell more than 1 percent.

The Global X Social Media ETF, which includes Facebook, LinkedIn and Groupon, dropped more than 3 percent. The Nasdaq biotechnology index also slid 3 percent.

Investors also seemed hesitant to make big bets ahead of the monthly government jobs report due Friday. Economists polled by Reuters expect a gain of 197,000 new jobs in March. The U.S. created 175,000 jobs in February, exceeding expectations.

On the economic front, weekly jobless claims gained more than expected last week, increasing 16,000 to a seasonally adjusted 326,000, according to the Labor Department. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 317,000.

Growth in the services sector accelerated in March, with the Institute for Supply Management saying its service sector index rising to 53.1 in March, slightly below expectations for a reading of 53.5 but ahead of the February read of 51.6.

Meanwhile, U.S. trade deficit unexpectedly widened 7.7 percent to $42.3 billion in February, according to the Commerce Department as exports fell to their lowest level in five months, further signs economic growth slowed in the first quarter. Economists polled by Reuters had forecast the trade deficit falling to $38.5 billion.

European shares shaved their losses after European Central Bank President Mario Draghi said the central bank discussed a series of unconventional policy measures, including quantitative easing, at its latest policy meeting. Earlier, the ECB chose to keep interest rates unchanged at the record-low 0.25 percent, where it has stayed since last November.

Meanwhile, Russia’s economy minister, Alexey Ulyukaev, told CNBC that JPMorgan will not face retaliation after it refused to process a payment by the Russian embassy.

News Sources:  CNBC and CNN Money