Here Are 4 Hot Things to Know About Stocks Right Now
- Before Tuesday's declines, the Dow Jones Industrial Average and S&P 500 had risen for three straight sessions.
- The Dow remains more than 1,200 points below its all-time high set on Jan. 26.
- U.S. 10-year Treasury yields rose to 2.915% after Fed Chairman Jerome Powell hinted at more than three rate hikes in 2018.
- Consumer confidence in February reached a 17-year high.
Wall Street Overview
Stocks finished lower on Tuesday, Feb. 27, after Federal Reserve Chairman Jerome Powell said the central bank would stick with gradual interest rate increases as the U.S. economy's acceleration warrants tightening the loose monetary policy implemented after the 2008 financial crisis.
But in answering a question from Rep. Carolyn Maloney (D.-NY), Powell may have hinted at more rate hikes than initially anticipated.
"At the December meeting, the median [FOMC] participant called for three rate increases in 2018. Now since then -- and we will submit another projection, all of us, in three weeks -- but what we've seen is incoming data that suggests a strengthening in the economy," Powell said.
"Some of the headwinds the U.S. economy faced in previous years have turned into tailwinds," Powell said Tuesday before the House Financial Services Committee. "Despite the recent volatility, financial conditions remain accommodative. At the same time, inflation remains below our 2% longer-run objective."
The Fed has previously projected three rate hikes this year and two more in 2019.
U.S. 10-year Treasury yields rose sharply to 2.915% following Powell's comments.
Powell's appearance Tuesday was the first of two for the Fed chief on Capitol Hill this week. On Thursday, the central bank chief will testify before the Senate Banking Committee.
The Dow Jones Industrial Average declined 299 points, or 1.16%. The S&P 500 slipped 1.27% and the Nasdaq was down 1.23%. Leading the Dow lower were Walt Disney Co. (DIS) - Get Report and Nike Inc. (NKE) - Get Report .
Comcast Corp. (CMCSA) - Get Report said Tuesday that it was prepared to pay £22.1 billion ($30.88 billion) for Britain's Sky PLC (SKYAY) in a bid that would challenge both Rupert Murdoch's ambition to buy the remaining stake of his own company and Disney's plans to own the European pay-TV giant.
Comcast said it would offer £12.50 a share for Sky, a 16% premium to Twenty-First Century Fox Inc.'s (FOXA) - Get Report outstanding £10.75 bid for the 61% of Sky that it doesn't already own, a deal valued at around $15.5 billion. Comcast said its bid would be financed by cash and new debt and would need at least 50% approval by Sky shareholders.
Comcast shares fell 7%, while American depositary receipts of Sky jumped 21%.
Macy's Inc. (M) - Get Report said Tuesday that earnings and same-store sales for the fourth quarter topped analysts' expectations. Revenue of $8.67 billion came in slightly below estimates. The stock rose 3.4%.
Qualcomm Inc. (QCOM) - Get Report has dropped its objections to being acquired by Singapore's Broadcom Ltd. (AVGO) - Get Report and is willing to agree a deal with its rival chipmaker if it raises its takeover offer to $160 billion including debt, the Financial Times reported, citing people involved in the negotiations.
Microchip Technology Inc. (MCHP) - Get Report is in advanced talks to buy Microsemi Corp. (MSCC) , The Wall Street Journal reported, citing people familiar with the matter. The chipmakers are nearing a deal that would value Microsemi roughly in the mid-$60s a share, according to one of the people.
Microsemi shares rose 0.42%, while Microchip rose 2.5%.
Wearables maker Fitbit Inc. (FIT) - Get Report is likely to see additional losses and a big decline in revenue early this year after missing earnings and sales estimates for its fiscal fourth quarter, executives said.
The stock fell 12% on Tuesday, a day after Fitbit posted a quarterly loss of 2 cents a share on a non-GAAP basis vs. consensus estimates of a break-even quarter. Revenue in the period was $571 million, below estimates of $588 million.
Shares of Palo Alto Networks Inc. (PANW) - Get Report jumped 2.3% on Tuesday after the security-software company reported adjusted earnings in its fiscal second quarter that topped analysts' forecasts. Palo Alto Networks also raised its outlook for full-year revenue, billings and adjusted profit.
In U.S. economic data, durable goods orders fell 3.7% in January, the biggest pullback in six months, and wider than economists' predictions that called for a 2% decline. Consumer confidence in February rose more than expected in February, reaching a 17-year high as the economy accelerated.