Markets Cool

US equity markets gave back some recent gains in a session that saw renewed selling pressure materialize in the consumer staples, financials and consumer discretionary sectors. All three majors lost only modest ground in what seemed to be perfectly coordinated and seemingly calm tick lower after four successive days of gains. The NASDAQ was the leader lower shedding 1.03% or 46.53 points while the S&P 500 lost 0.47% and the Dow Industrials gave back 0.25%. Volume on the session contracted on the NYSE (-11.61%) and NASDAQ (-19.88%). A healthy, not all together unexpected, pullback on lighter volume actually adds a degree of confidence for investors.

Economic news on the day once again confirmed that good news is always interpreted that way by investors that are hoping for a pause in the Fed’s move on rates. The Weekly Jobless Claims data was significantly better than consensus expectations that had been calling for 275k. The weekly results  fell to 262k. Further evidence that the employment market is continuing to gain ground – despite fears to the contrary. Leading Indicators for January were -0.2%, hitting consensus.

The EIA Petroleum Status Report did reflect a marginal expansion of inventories on all three levels; crude (2.1M bbl), gasoline (3.0M bbl) and distillates (1.4M bbl). However the differential between this report and the previous week’s report was so inconsequential, investors looked beyond it.

Oil talks remain fluid, Russian oil minister Alexey Texler questions full participation

Today’s Economic Calendar has little potential to upend what has been a relatively constructive week for equities. The Consumer Price Index is out at 8:30 AM EST and Baker-Hughes Rig Count is released at 1:00 PM EST.

flickr photo: Håkan Dahlström