U.S. stock indexes capped a day of wobbly trading with slight losses Tuesday, erasing some of their modest gains from the day before.
The market changed course several times during the day as investors balanced conflicting U.S. economic data and testimony from Federal Reserve Chairman Jerome H. Powell.
The Fed chief told Congress that the U.S. economy should keep expanding at a solid, though somewhat slower pace this year, and he reassured markets that the nation’s central bank would be “patient” in raising interest rates.
Stocks got a boost after Powell’s remarks, though it faded toward the end of the day.
“Powell was the big news today,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “He didn’t really say anything new, but he didn’t say anything wrong.”
Healthcare, financial and industrial companies took some of the heaviest losses, offsetting gains by technology stocks and retailers.
The Standard & Poor’s 500 index slipped 2.21 points, or 0.1%, to 2,793.90. The benchmark index, which has posted weekly gains the last four weeks in a row, broke a two-day winning streak.
The Dow Jones industrial average edged down 33.97 points, or 0.1%, to 26,057.98. The Nasdaq composite declined 5.16 points, or 0.1%, to 7,549.30. The Russell 2000 index of smaller companies fell 11.32 points, or 0.7%, to 1,577.48. Major European indexes finished mostly higher.
U.S stocks slipped in early trading after the government reported that the number of homes being built last month plunged to the lowest level in more than two years, the latest sign that the housing market is cooling. Home builders traded broadly lower after the report.
That downbeat housing report was countered by a subsequent survey from the Conference Board that shows consumers were far more confident last month than economists had expected. The increase in the index came after three months of declines.
Then the market got help from Powell, who told the Senate Banking Committee that the Fed is taking its time to decide when to change interest rates this year.
“When I say that we are going to be patient, what that really means is that we are in no rush to make a judgment about changes in policy,” Powell told the panel. “We are going to be patient. We are going to allow the situation to evolve and allow the data to come in. And I think we are in a very good place to do that.”
It was Powell’s first appearance before Congress since the Fed signaled in December that it would hold off on raising interest rates. In addition to saying he expects solid but slower growth in 2019, Powell warned of growing risks, including a global slowdown, volatile financial markets and uncertainty about U.S. trade policy.
Many private economists believe the Fed will keep rates unchanged until late in the year and may not raise them this year at all. Powell is scheduled to testify before the House Financial Services Committee on Wednesday.
Traders also had their eye on corporate earnings reports.
A weak housing market helped slam the brakes on growth for home improvement retailer Home Depot. The stock slid 0.9% to $188.30 after a key sales measure fell short of Wall Street’s forecasts. The company also said it expects weak sales this year. Its rival Lowe’s is due to report quarterly results Wednesday.
The housing market initially cooled last year as average 30-year mortgage rates climbed to nearly 5%. Home prices have consistently risen faster than wages and the inventory of homes listed for $250,000 or less is tight, suggesting a sluggish market going forward.
Home builders also lost ground Tuesday. LGI Homes led the slide, dropping 4.5% to $58.52.
Macy’s gained 1.5% to $24.72 after the department store company said it would trim its management structure in a move that could save it $100 million as it gears up for fiercer competition in the retail sector. It also posted profit that surged past Wall Street’s forecast for the quarter.
J.M. Smucker climbed 5% to $106.09 after the food maker reported higher demand for premium products during its most recent quarter. Its results beat Wall Street’s forecasts.
AutoZone jumped 5.1% to $935 after the auto parts retailer’s sales and profit rose in its most recent quarter, surpassing analyst expectations.
U.S. crude oil was essentially flat, closing at $55.50 a barrel in New York. Brent crude, used to price international oils, rose 0.7% to settle at $65.21 a barrel in London.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.64% from 2.67%.
The dollar fell to 110.51 yen from 110.15 yen on Monday. The euro strengthened to $1.1395 from $1.1364.
Gold fell 0.1% to $1,328.50 an ounce. Silver and copper were little changed at $15.83 an ounce and $2.95 a pound, respectively.
In other energy futures trading, wholesale gasoline rose 2.7% to $1.59 a gallon. Heating oil rose 1.2% to $2 a gallon. Natural gas rose 0.7% to $2.86 per 1,000 cubic feet.