A 1.5% drop in the U.S. dollar triggered another round of stock buying on Wall Street today, and U.S. markets traded higher across the board for most of the day.
However, in the last hour, stocks sold off considerably, with the Dow dropping about 80 points. Oil and commodities were lifted as well by the dollar selloff. In the past week, the direction of the dollar has had a large impact on the movement of stocks.
In other economic news, the National Association of Realtors reported that existing home sales were 1.2% higher, but narrowly missed the projected estimate of 4.9 million units sold. A tight inventory of housing supply was said to be accountable for such a modest bounce, after units fell 4.9% in January.
When inventory is tight, prices rise and limit the selection that buyers have from which to choose.
Elsewhere this afternoon, Stanley Fischer, the vice chairman of the Federal Reserve, said that the Fed does not have plans to hike regular interest rates, although an increase in the Federal Fund rate is likely. Fischer is looking for “further improvement in the labor market,” and an inflation rate that moves back toward the 2% range.
The Nasdaq Composite was off 0.3% today, while the S&P 500 slipped nearly 0.2% and the Dow Jones Industrial Average was off a fraction.
Sectors moving in the right direction today were basic materials and non-cyclical consumer goods. This gave a boost to stocks such as Tiffany & Co. (NYSE:TIF), FreePort-McMoRan Inc. (NYSE:FCX) and Staples, Inc. (NASDAQ:SPLS), which finished the day as three of today’s best stocks.
Tiffany & Co. (TIF)
TIF stock fell almost 4% on Friday after announcing fourth-quarter earnings that were good, but sales that fell short of estimates, along with weak forward guidance. But this morning, Bank of America analyst Lorraine Hutchinson saved the day for TIF stockholders by reiterating a buy rating and $105 price target for TIF stock.
Bank of America noted that it has “confidence in Tiffany’s ability to drive long-term growth.” TIF stock, which closed near $88. was up 5.8% today, but was still off its $107 high in December.
Freeport-McMoRan Inc (FCX)
FCX stock was up 5% today on 20.6 million shares, and while there was no direct news to propel the stock, OptionMonster did take note that there was heavy buying for the May 21 option calls, with 11,500 of the total 15,000 volume for the day coming in the first few minutes of the trading day.
Another boost for FCX stock came from a 1% increase in copper prices on the day, triggered by the selloff in the dollar. FCX stock has been in a downtrend for several months now, but appears to be putting in a bottom above $18.
Staples, Inc. (SPLS)
SPLS stock was also the beneficiary of an analyst upgrade today, and as a result SPLS stock pushed 3.4% higher. UBS analysts raised their rating of Staples from “neutral” to “buy,” saying the risk/reward potential and earnings growth from the recent acquisition of Office Depot Inc (NASDAQ:ODP) will be a positive for SPLS stock.
SPLS stock has thus far traded sideways for all of 2015.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
