US Stocks May Be Headed for a 'Tumultuous First Quarter'
New York (Jan 5) It was another unsettled day in the stock market. You might as well get used to it. Stocks spent much of Tuesday flitting between slight losses and gains after a massive selloff a day earlier. In the end, the major averages closed little changed.
The S&P 500 rose 0.2%, the Dow Jones Industrial Average inched up 0.06% and the Nasdaq slipped 0.24%.
Some market pros expect that kind of undecided, unpredictable trading to continue all winter.
"We are calling for a fairly tumultuous first quarter given the newness of the rate hike and what the [Federal Reserve] does going forward," Paul Springmeyer, senior vice president at The Private Client Reserve of U.S. Bank, told TheStreet. "We've had enough moving levers of late that it's probably going to be a little bit rockier until things stabilize and we get into a more decided path for the remainder of the year."
U.S. stocks tanked on Monday, the first day of trading in 2016, as fears over China's economy and Middle East tensions spooked Wall Street. The Dow suffered its worst start to the year since 2008.
"The first week of trading in the New Year generally sets the tone of the direction of the market for the remainder of the year, and while we do expect a market correction, our greatest concerns remain geopolitical," Peter Cardillo, chief market economist at First Standard Financial, wrote in a note. "Anything that disrupts investors' confidence raises the risk of a very volatile market environment."
Gun stocks were higher as President Barack Obama outlined executive action on gun control. Obama said the measures include increased mental health treatment and more-intensive background checks.
Smith & Wesson (SWHC - Get Report) was already 10% higher after raising its sales forecast for its current quarter. The gunmaker expects quarterly sales between $175 million and $180 million thanks to a solid performance during gun-show season. Rival Sturm, Ruger & Co. (RGR - Get Report) climbed 7%.
Auto sales reached a record high in 2015 as more Americans bought new cars thanks to low gas prices, a booming job market, and improved consumer confidence. A total 17.5 million vehicles were sold over the year, up from a previous record set in 2000.
Ford (F - Get Report) said sales in December rose 8% from a year earlier while sales for 2015 jumped 5%. The stock declined 2.6% on Tuesday. Toyota (TM - Get Report) car sales jumped 10.8% to 238,350 in December, slightly below estimates of 13% growth. The automaker saw solid gains in both truck and car sales.
Fiat Chrysler (FCAU) enjoyed its best December in 90 years after reporting a 13% jump in sales. Jeep sales soared 42%, the best month ever. Sales climbed 7% over the year as a whole. Fiat Chrysler shares fell slightly.
Volkswagen (VLKAY) continued to see a drop in U.S. sales following its scandal last year. Sales fell 9.1% in December to 30,956 vehicles. Shares have fallen more than 20% since mid-September when news broke that Volkswagen had installed emissions test-gaming software in its vehicles.
General Motors (GM) reported a 5.7% increase in December sales, beating analysts' estimates of a 5% increase. However, shares fell as the automaker failed to match the pace of rivals, such as Ford.