US Stocks Drop as Dollar Gains

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US Stocks Drop as Dollar Gains

On Tuesday, US stocks were lower after pulling back from the futures’ gains while the dollar gained.

The US dollar index gained 0.5% against the basket of currencies, up for the sixth time in the last eight sessions of its high of four years.

Chase Investment Counsel President, Peter Tuz was quoted by Reuters as having said, “The dollar can absolutely become a headwind to US companies, and if a lot cite the dollar for weakness in sales, that could really translate to the stock market.”

Tuz cited Phillip Morris, tobacco giant, as the type of company that is likely to suffer due to the strength of the dollar. He said, “Earnings estimates have really come down there in part due to the dollar. We own it, but we’re not in the mood to buy more until things stabilize.”

Phillip Morris dropped 0.3%.

The Standard & Poor 500 index dropped 0.2% or 3.99 points to 1,973.81, the Dow Jones industrial Average dropped 0.15% or 25.3 points to 17, 045.92 while the Nasdaq Composite dropped 0.29% or 12.96 points to 4,492.89.

According to Bloomberg, the S&P 500 is dropping to near its average price in the last 50 days after dropping below this level on September 25.

The S&P 500 energy producers dropped 1.1% as Brent crude and West Texas Intermediate headed for the largest quarterly drop in two years on abundant supply.

Edward Jones Canadian market strategist, Craig Fehr said, “It’s quarter-end, investors are parsing out the economic data and the geopolitical landscape. Investors are trying to digest all of this news and we’re here at the end of the month and end of the quarter so there’s some short-term repositioning in the market.”

Declining issues outnumbered advancing issues by 1900 to 857, a ratio of 2.21 to 1 on the downside, on the New York Stock Exchange. Nasdaq 1,552 issues were dropping and 717 were advancing on a ration of 2.16 to 1.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com