Stocks traded lower on the two-year anniversary of the pandemic market bottom as familiar worries weighed on investor sentiment.
For starters, sizzling energy prices kept inflation concerns front and center. U.S. crude futures jumped 5.2% to $114.93 per barrel after Russia said a storm-damaged pipeline running from Kazakhstan to the Black Sea could cut exports by roughly 1 million barrels per day in the near term.
- SEE MORE What the Russia Oil Ban Means for Stocks
Rising interest rates also remained in focus as speeches from several Federal Reserve speakers indicated support for taking a more hawkish approach on inflation.
Among them was Cleveland Fed President Loretta Mester â a voting member of the central bank’s rate-setting committee â who told reporters that she thinks “we’re going to need to do some 50-basis-points moves.” (A basis point is one-one hundredth of a percentage point.)
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Elsewhere on the economic front, data from the Census Bureau showed new home sales fell by a bigger-than-expected 2% in February to an annual rate of 772,000.
Additionally, mortgage applications are down around 8% this week, says Michael Reinking, senior market strategist for the New York Stock Exchange. “As we approach the ever-important spring selling season, this is a dynamic to pay close attention to,” he adds.
At the close, the Dow Jones Industrial Average was down 1.3% at 34,358, the Nasdaq Composite was off 1.3% to 13,922 and the S&P 500 Index had given back 1.2% to 4,456.
YCharts
Other news in the stock market today:
- The small-cap Russell 2000 plunged 1.7% to 2,052.
- Gold futures climbed 0.8% to $1,937.30 per ounce.
- Bitcoin slipped 0.3% to $42,234.00. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Adobe (ADBE, -9.3%) plunged at the open and remained grounded throughout the session following the company’s Tuesday night earnings report, during which it lowered full-year sales forecasts to reflect the stoppage of operations in Russia. Its quarterly revenues of $4.26 billion and adjusted profits of $3.37 per share were both slightly better than expected. However, Adobe reduced its 2022 annual recurring revenue forecasts from Russia and Ukraine by a total of $87 million. “While Adobe is clearly going through a revenue deceleration and is the first large software firm to flag European weakness as a result of the conflict, the pending price increase will help to soften the blow,” says UBS analyst Karl Keirstead, who remains on the sidelines with a Neutral rating (equivalent of Hold).
- Apple (AAPL, +0.8%) represented some rare green ink in a sea of red Wednesday. Multiple reports, citing people familiar with the matter, said Apple bought British financial technology startup Credit Kudos in a deal worth $150 million. The company is a competitor of “big three” credit reporting agencies Experian (EXPGY, -1.8%), Equifax (EFX, -1.2%) and TransUnion (TRU, -1.3%). “Credit Kudos’ intelligent products enable businesses to leverage Open Banking to enhance affordability and risk assessments,” according to Credit Kudos’ website. “Our predictive insights are built by combining transaction and loan outcome data.”Â
Stock Buybacks Could Have a Big Year
Don’t let the market’s daily noise distract you from its long-term signal. After all, investing is a marathon, not a sprint â and there are many reasons to be upbeat toward stocks, especially those that return cash to shareholders.
Companies that reliably grow their dividends, or gift investors with special one-time payments, are always worth paying attention to. And then there are those firms that have generous buyback programs, which can help boost earnings per share and stock prices to boot.
- SEE MORE 5 Actively Managed Vanguard Funds to Own for the Long Haul
Indeed, the breadth of buybacks is currently running near a record high, according to the Goldman Sachs Portfolio Strategy Research team. As a result, GS recently raised its S&P 500 buyback forecast by 12% to $1 trillion for 2022.
“Looking ahead, our previously assumed headwinds to buybacks from higher effective corporate tax rates and a buyback excise tax no longer look likely,” the team says. “Based on our forecast, buybacks will continue to represent the largest use of cash for S&P 500 companies, followed by capital expenditures.”
Read on as we explore six companies that are repurchasing impressive amounts of their own stock.
Karee Venema was long AAPL as of this writing.
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