After a week of geopolitical uncertainty, US stocks were slightly higher this morning recovering from their worst session since early February, but investors were reluctant to make big bets ahead of a referendum in Crimea this weekend
By Paolo Palazzi-Xirinachs
Friday, March 14, 2014
The S&P 500 is currently below a key technical support level of 1,850 for the second day. Curbing investors' enthusiasm for equities, Russia's navy said fighter jets had started training exercises over the Mediterranean Sea, an announcement likely to raise tensions in the standoff with Ukraine. Global equity markets were pressured, while gold and the yen strengthened as traders flocked into the safe-haven assets. As of noon EDT, the Dow has risen 28.93 points or 0.18 %, to 16,137.82, the S&P 500 .SPX has gained 3.06 points or 0.17 %, to 1,849.4 and the Nasdaq has added 5.839 points or 0.14 %, to 4,266.259. The Dow and the S&P 500 look to be set for weekly declines after two weeks of gains, while the Nasdaq seems headed for the first down week after five weeks of gains.
Consumer confidence in the US unexpectedly dropped in March to a four-month low, indicating household spending may be slow to pick up from a weather-related setback earlier this year. The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 79.9 this month from 81.6 in February. A separate report showed producer prices dropped in February, held back by the biggest decrease in the cost of services in almost a year. The 0.1% decrease in the producer-price index followed a 0.2% rise the prior month. The Federal Reserve is trying to determine how much recent economic data has been affected by weather. Chair Janet Yellen said last month the US economy was strong enough to withstand measured reductions to the central bank’s monthly bond purchases.
The Federal Open Market Committee (FOMC), which meets next week March 18-19, has cut monthly bond buying to $65 billion from $85 billion in December 2013. Policy makers have indicated they plan to taper by $10 billion at each meeting absent a weakening in the economy. Three rounds of Fed stimulus have helped push the S&P 500 up 173 % from a 12-year low, as US equities begin the sixth year of a bull market that started March 9, 2009. The Chicago Board Options Exchange Volatility Index, a gauge for US stock volatility, rose 4 % to 16.86 today. The measure has advanced 23 % this year.
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