US stock market update

Investor sentiment was also hurt after Moody's warned that the US's AAA rating was more likely to see a downgrade than France and Germany. However, the ratings agency was quick to note that there is no imminent rating pressure for the US or the other countries.

A proposed bank regulation bill was also in focus. The bill calls for a new consumer protection bureau within the Federal Reserve that would regulate all lending transactions. It would also set up a new process to put struggling firms under government control and break up large companies if they posed a major threat to the stability of the system.

Oil and energy companies declined on lower crude prices. Exxon Mobil, El Paso Corp, Southwestern Energy, Cabot oil & Gas Corp and Masset Energy slipped between 1% and 3%.

Consumer companies rallied on an analyst upgrade of Wal-Mart stores. Wal-Mart rallied almost 3%.

Google is reportedly close to shutting down its Chinese search engine amid strict government monitoring and a recent targeted cyber attack. Shares fell 4% and dragged on other tech stocks.

Philips-Van Heusen, owner of Calvin Klein, will buy fashion brand Tommy Hilfiger from Apax Partners in a cash-and-stock deal worth US$3B. Shares of Philips-Van Heusen rose 9%.

Chordiant Software shares rallied 30% in unusually active trading after the maker of customer service management software agreed to by buy by Pegasystems for US$161.5M in cash.

Boston Scientific fell 13%. The company had suspended sales and implants of its line of implantable cardiac defibrillators because of a documentation error in its filings with the US Food and Drug Administration.

AIG said it will withhold US$21M in bonuses that are due to former and current staff of its Financial Products unit, the unit most directly responsibly for its near-collapse 18 months ago.

Since bottoming at a 12-year low on 9 March last year, the Dow has gained 62%, the S&P 500 has rallied 70% and the NASDAQ has risen 87%.

In economic news, industrial production and capacity utilisation, which measure factory output, both rose more than expected last month, according to a Federal Reserve report. Industrial production rose 0.1%, while capacity utilisation rose to 72.7% from 72.5% in January.

The Empire manufacturing survey, a regional reading on manufacturing, fell to 22.86 from 25.91 in February, which was slightly better than expected.

US Economic Calendar

• Mar-16 - Building Permits (For: Feb, F/Cast: 601K, Prior: 622K)
• Mar-16 - Housing Starts (For: Feb, F/Cast: 570K, Prior: 591K)
• Mar-16 - Import Prices ex-oil (For: Feb, F/Cast: NA, Prior: 0.4%)
• Mar-16 - Export Prices ex-ag. (For: Feb, F/Cast: NA, Prior: 0.7%)
• Mar-16 - FOMC Rate Decision (For: Mar-16, F/Cast: 0.3%, Prior: 0.3%)

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