US Stock Market Overview – Stocks Drop Led Down By Energy; US Senate Passes Fiscal Policy BillHousing Starts Fall Less than Expected
US stocks tumbled on Friday but rallied into the close as the Senate passed the House of Representatives emergency coronavirus bill. All sectors in the S&P 500 index were lower on Wednesday led by down a 12.6% decline in energy shares. The decline in energy was driven by a 29% drop in crude oil prices and natural gas prices hitting all-time lows. US yields rose, pushing the dollar index above 101, for the first time since March of 2017. The flow into the US dollar shows that investors do not want to be in assets other than the dollar and are keeping their assets in cash. The VIX volatility index edged higher but did not make a new high despite a 5% drop in the S&P 500 index. The drop in the S&P 500 index intra-day eclipsed the lows seen in December of 2018. At the lows of the session, the US benchmark index was only up 6% for the time that President Trump has been in office, the worst of any President over the past 40-year except for George W. Bush.
The Senate Passed a Fiscal Policy Bill
The Senate passed a bill to expand paid leave and unemployment benefits in response to the coronavirus pandemic. The chamber approved the bipartisan plan in a 90-8 vote. Congress and the administration are also tackling other bills that could send checks directly to individuals.
US Housing Starts Fell Less than Expected
The commerce department reported that homebuilding fell in February, pulled down by a sharp decline in the construction of multifamily housing units. Housing starts dropped 1.5% to an annual rate of 1.599 million units last month. Data for January was revised higher to show homebuilding increasing to a pace of 1.624 million units instead of dropping to 1.567 million units as previously reported. Expectations were for housing start to fall to 1.500 million units in February. Housing starts jumped 39.2% on a year-on-year basis in February. Building permits tumbled 5.5% to a rate of 1.464 million units in February.