Market Snapshot: Stock market searches for direction as traders decipher Powell testimony


U.S. stock-market indexes switched between gains and losses on Thursday, after Federal Reserve chief Jerome Powell said he saw no signs of significant wage inflation as he testified before a Senate committee.

Stronger-than-expected economic releases earlier lent support to markets, with the Institute for Supply Management’s manufacturing index hitting a 13-year high.

See: Powell’s second day of testimony on Fed policy: Live blog and video

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, +0.06% swung from a triple-digit loss to a triple-digit gain, last trading 23 points, or 0.1%, lower at 25,003.

The S&P 500 SPX, +0.05% fell 3 points, or 014%, to 2,710, with six of the 11 main sectors trading lower.

The Nasdaq Composite Index COMP, -0.04% declined 17 points, or 0.2%, to 7,254.

The Dow gave up 4.3% in February, notching its biggest monthly drop in more than two years and paring its advance over the past 12 months to 20%.

What are strategists saying?

“Stock markets are a lot more skittish than they were in the past, because the skew in the monetary policy is on the tightening side,” said Wouter Sturkenboom, senior investment strategist at Russell Investments.

“It’s reasonable for markets to start repricing a possibility of higher inflation and higher interest rates,” Sturkenboom said.

Opinion: Powell’s first faux pas came quick

And see: 4 financial-market takeaways from Powell’s debut

What else could help drive markets?

A strong economy and tight labor market has contributed to higher inflation, with the personal-consumption expenditure inflation index up 0.4% in January. The yearly increase in the PCE was flat at 1.7% for the third month in a row, below the Fed’s 2% target.

Initial U.S. jobless claims fell by 10,000 to 210,000 in the seven days ended Feb. 24, the lowest level in nearly 50 years.

The Institute for Supply Management said its manufacturing index rose to 60.8% in February, up from 59.1% in January, to reach the highest level since May 2004.

A January report on construction spending was unchanged.

Check out: MarketWatch’s Economic Calendar

In addition, reports covering U.S. auto sales for February are scheduled to roll in throughout the day.

FCA US, the U.S. unit of Fiat Chrysler Automobiles NV FCA, +0.00%  sales fell 1% in February to 168,326 vehicles. Shares fell 2%.

Which stocks look like key movers?

Shares in L Brands Inc. LB, -10.22% tumbled 10% after the Victoria’s Secret parent late Wednesday gave a quarterly outlook that appeared to disappoint Wall Street. Inc.’s stock CRM, +3.12% rose 4.7% after the software company’s quarterly results beat expectations.

Best Buy Co. BBY, +4.44% earnings and revenue came in above expectations, sending shares 2% higher.

Kohl’s Corp. KSS, -6.36% shares dropped 6.4% after disappointing quarterly earnings.

Barnes & Noble Inc. BKS, -1.11% shares slid 6.7% after it reported a fiscal third-quarter loss.

What are other assets doing?

European equity gauges SXXP, -1.17% traded sharply lower, while Asian markets finished mixed. Gold futures GCJ8, -0.86% and oil futures CLJ8, -1.82% lost ground, as the ICE U.S. Dollar Index DXY, +0.21% edged up.