US close: Stocks lower, oil and gold surge on Middle Eastern conflict concerns
US stocks closed slightly lower on Thursday, recovering from steeper declines made earlier in the day as a result of conflict in the Middle East and underwhelming data.
The Dow Jones Industrial Average closed 0.23% lower at 17,678 while the S&P500 index fell 0.24% to 2,056. The S&P500 has now erased its gains for 2015 so far after three years of booking annual double digit gains. The NASDAQ closed 0.27% lower at 4,863.
Saudi Arabia's attack on anti-government rebels in Yemen sent oil prices higher, as investors worried that conflict could impact the world's biggest oil exporter's production. "The conflict has the potential to act as a drag on oil supplies as most oil tankers from Arab producers must pass by the Yemen coastline in order to get through the Red Sea and Suez Canal," said Craig Erlam, senior market analyst at OANDA.
Meanwhile, safe-haven investments like precious metals made gains, with gold up $7.80 to $1,204.80 per ounce, silver up 14 cents to $17.14 per ounce and copper up two cents to $2.81 per pound. Gold tends to see capital inflows in times of uncertainty. The CBOE’s VIX index which measures volatility and regarded as the best gauge of fear in the market rose 2.7% to stand at 17.
In terms of data, a better-than-expected report on jobless claims failed to offset concerns of a sluggish economy during the first quarter. Weekly initial jobless claims falling by 9,000 to 282,000 in the week ending 21 March, which in turn pushed US government bonds to retreat. The yield on the benchmark 10-year Treasury note was at 2.01%, compared with 1.93% on Wednesday.
The euro fell to $1.0879 and the dollar declined to 119.27 Japanese yen, a reversal from the dollar's appreciation this year which has made US goods more expensive abroad and therefore impaired US companies competitively.
"The dollar is going to be a drag on company earnings, at least temporarily," said Stephen Freedman, a strategist at UBS Wealth Management Research.
In the absence of more US economic data, eyes were on comments from Atlanta Federal Reserve head Dennis Lockhart who said the US central bank will move in a very deliberate fashion when it begins to normalise its monetary policy, so there is little risk that it might be forced to backtrack.
In company news, Lululemon Athletica rebounded from earlier losses to trade higher. The yoga apparel company offered a weak outlook for the first quarter, although fourth-quarter earnings rose to $110.9m, or 78 cents per share, up from $109.7 m, or 75 cents per share, a year earlier.
Red Hat ended higher after revealing its fourth-quarter earnings rose to $48 million, or 26 cents a share, from $45 million, or 24 cents a share a year ago. On an adjusted basis, the company earned 43 cents per share, beating analysts expectations of 41 cents per share. It also said the board approved a stock repurchase program worth $500 million.
SanDisk Corp, which plunged in early trading after the company cut its sales outlook, closed slightly higher.
S&P 500 - Risers
Red Hat Inc. (RHT) $75.36 +10.09%
Accenture Plc (ACN) $94.17 +6.76%
Starwood Hotels & Resorts Worldwide Inc. (HOT) $84.78 +3.85%
Harris Corp. (HRS) $73.28 +3.74%
Denbury Resources Inc. (DNR) $7.92 +3.66%
QEP Resources Inc (QEP) $21.68 +3.04%
LyondellBasell Industries (LYB) $87.86 +2.88%
Noble Energy Inc. (NBL) $47.94 +2.50%
Dr Pepper Snapple Group Inc. (DPS) $79.10 +2.50%
Cognizant Technology Solutions Corp. (CTSH) $62.52 +2.17%
S&P 500 - Fallers
Sandisk Corp. (SNDK) $66.20 -18.45%
Peabody Energy Corp. (BTU) $5.60 -11.81%
CONSOL Energy Inc. (CNX) $27.41 -5.55%
Coach Inc. (COH) $40.69 -3.58%
Keurig Green Mountain Inc (GMCR) $113.55 -3.53%
Southwestern Energy Co. (SWN) $22.53 -3.39%
Staples Inc. (SPLS) $16.02 -3.17%
Consolidated Edison Inc. (ED) $58.80 -2.94%
Best Buy Co. Inc. (BBY) $38.40 -2.59%
GameStop Corp. (GME) $38.79 -2.56%
Dow Jones I.A - Risers
International Business Machines Corp. (IBM) $160.59 +0.87%
Wal-Mart Stores Inc. (WMT) $81.89 +0.70%
Intel Corp. (INTC) $30.08 +0.64%
AT&T Inc. (T) $32.82 +0.61%
Nike Inc. (NKE) $99.33 +0.34%
Walt Disney Co. (DIS) $105.24 +0.23%
Caterpillar Inc. (CAT) $79.88 +0.03%
Dow Jones I.A - Fallers
American Express Co. (AXP) $78.48 -2.03%
Cisco Systems Inc. (CSCO) $27.08 -1.38%
Home Depot Inc. (HD) $112.37 -1.15%
Merck & Co. Inc. (MRK) $57.60 -1.13%
Procter & Gamble Co. (PG) $82.15 -1.04%
Travelers Company Inc. (TRV) $106.83 -0.72%
Exxon Mobil Corp. (XOM) $84.32 -0.64%
Verizon Communications Inc. (VZ) $48.42 -0.64%
Microsoft Corp. (MSFT) $41.21 -0.60%
McDonald's Corp. (MCD) $97.64 -0.51%
Nasdaq 100 - Risers
Cognizant Technology Solutions Corp. (CTSH) $62.52 +2.17%
Kraft Foods Group, Inc. (KRFT) $84.39 +1.47%
Gilead Sciences Inc. (GILD) $101.07 +1.22%
Whole Foods Market Inc. (WFM) $52.15 +1.07%
Mylan Inc. (MYL) $61.88 +1.06%
O'Reilly Automotive Inc. (ORLY) $211.19 +1.06%
Check Point Software Technologies Ltd. (CHKP) $82.19 +1.00%
Citrix Systems Inc. (CTXS) $63.40 +0.88%
Sirius XM Holdings Inc (SIRI) $3.86 +0.78%
Fiserv Inc. (FISV) $78.43 +0.77%
Nasdaq 100 - Fallers
Sandisk Corp. (SNDK) $66.20 -18.45%
Vimpelcom Ltd Ads (VIP) $5.27 -6.06%
Keurig Green Mountain Inc (GMCR) $113.55 -3.53%
Staples Inc. (SPLS) $16.02 -3.17%
Nxp Semiconductors Nv (NXPI) $97.50 -2.65%
Mondelez International Inc. (MDLZ) $35.08 -2.02%
Tesla Motors Inc (TSLA) $190.41 -2.00%
Discovery Communications Inc. Class A (DISCA) $30.93 -1.97%
Wynn Resorts Ltd. (WYNN) $126.86 -1.83%
Bed Bath & Beyond Inc. (BBBY) $73.78 -1.65%