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Late Sell Off Leaves Wall Street Lower for Second Consecutive Day
21-Feb-18 16:30 ET
Dow -166.97 at 24797.78, Nasdaq -16.08 at 7218.23, S&P -14.93 at 2701.33

https://www.briefing.com/investor/markets/stock-market-update/2018/2/21/late-sell-off-leaves-wall-street-lower-for-second-consecutive-day.htm

[BRIEFING.COM] Stocks got off to a good start on Wednesday, but gave back all of their gains, and then some, following the release of the minutes from the January FOMC meeting. The S&P 500 was up as much as 1.2%, but eventually settled with a loss of 0.6%. Similarly, the Dow and the Nasdaq lost 0.7% and 0.2%, respectively, after being up more than 1.0% apiece.

The value of the aforementioned minutes was diminished by the fact that a lot has happened since the January 30-31 FOMC meeting: the CPI and PPI reports for January were released, Congress passed a two-year budget agreement that will increase spending by approximately $420 billion, the stock market endured a sharp sell off, losing around 8.0% in just a week, and Jerome Powell replaced Janet Yellen as the head of the Federal Reserve. In other words, the minutes are somewhat out of date.

Nonetheless, the minutes weren't without some value; most notably, they revealed that almost all FOMC members expect inflation to increase in 2018 and that a majority of members believe a stronger outlook for economic growth raises the "likelihood that further gradual policy firming would be appropriate."

U.S. Treasuries extended earlier losses following the release of the minutes, pushing yields higher across the curve. The yield on the 10-yr note finished at 2.94%, up from 2.91% ahead of the minutes and up from 2.89% at Tuesday's close. However, the 2-yr yield had a relatively muted reaction to the minutes, finishing four basis points higher at 2.26%.

As for equities, 11 of 11 S&P 500 sectors finished in negative territory, with the energy (-1.7%), consumer staples (-1.2%), utilities (-1.3%), telecom services (-1.6%), and real estate (-1.8%) sectors leading the retreat. Conversely, the financials (-0.1%), consumer discretionary (-0.1%), and industrials (unch) groups exhibited relative strength.

In corporate news, United Tech (UTX 129.26, +2.80) outperformed on Wednesday, adding 2.2%, after its Pratt & Whitney unit announced that it's solved issues that have caused delays in supplying engines to European planemaker Airbus. Meanwhile, Advance Auto (AAP 114.00, +8.65) spiked 8.2% after beating top and bottom line estimates for the fourth quarter.

Reviewing Wednesday's economic data, which was limited to Existing Home Sales for January and the weekly MBA Mortgage Applications Index:

Existing home sales decreased 3.2% in January to an annualized rate of 5.38 million units (Briefing.com consensus 5.62 million). The December reading was revised to 5.56 million from 5.57 million.
The key takeaway from the report is that notable supply constraints continue to act as a drag on overall sales. The limited inventory--and the high prices on available inventory--is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are going to feel added affordability pressures now from rising mortgage rates.
The weekly MBA Mortgage Applications Index decrease 6.6% to follow last week's 4.1% decline.

On Thursday, investors will receive the weekly Initial Claims report (Briefing.com consensus 233K) and the Leading Indicators report for January (Briefing.com consensus +0.8%) at 8:30 AM ET and 10:00 AM ET, respectively.

Nasdaq Composite: +4.6% YTD
S&P 500: +1.0% YTD
Dow Jones Industrial Average: +0.3% YTD
Russell 2000: -0.2% YTD