Stocks fell on Wednesday as oil prices gained, renewing inflation fears that have weighed on sentiment for the past several weeks. The Dow Jones Industrial Average fell nearly 450 points in morning trade, while the S&P 500 Index declined by 1.2% and the Nasdaq Composite slipped 1.3% lower.
Oil prices rose on the day, with U.S. benchmark West Texas Intermediate
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
New homes sales fall for second straight month in February:
U.S. new home sales unexpectedly fell for a second straight month in February, underscoring slowing housing market activity and demand as interest rates move higher, weighing on affordability.
New home sales declined by 2.0% in February compared to January, according to the Commerce Department's report published Wednesday. In January, new home sales were downwardly revised to show a 8.4% decline, almost double the 4.5% drop previously reported.
With the latest decrease, new homes sales were at a seasonally adjusted annualized rate of 772,000, the lowest level since November 2021.
Mortgage applications fell for a second week as interest rates rise:
U.S. mortgage application volume fell for a second straight week and posted the largest decline in a month as the Federal Reserve issued its first interest rate hike since 2018.
The Mortgage Bankers Association's index tracking weekly mortgage applications fell 8.1% for the week ended March 18, following a 1.2% drop recorded for the previous week. Refinances fell by 14% compared to the prior week and by 54% over the comparable period last year. Purchases were down 1% on a seasonally unadjusted basis week-over-week, and dropped 12% over last year.
"Rates on 30-year conforming mortgages jumped by 23 basis points last week, the largest weekly increase since March 2020. The jump in rates comes as markets moved to price in a much faster pace of rate hikes, as well as expectations of fear MBS [mortgage-backed securities] purchases for the Federal Reserve," Mike Fratantoni, MBA senior vice president and chief economist, said in a press statement.
'WIth mortgage rates now at 4.5%, compared to rates at or below 3% not that long ago, it is no surprise that refinance volume has dropped by more than 50% compared to this time last year," Frantantoni added. "MBA's new March forecast expects mortgage rates to continue to trend higher through the course of 2022."
Here's how benchmarks started traded after market open:
S&P 500 Index: -0.55% or -24.67 points to 4,486.94
Dow Jones Industrial Average: -0.49% or -169.02 points to 34,613.89
Nasdaq Composite Index: -0.78% or -110.42 points to 13,998.90
