Stocks ended the day mixed, with the S&P 500 index and the Nasdaq Composite bouncing off session lows in the midafternoon after investors considered mainly favorable U.S. economic data, corporate earnings reports, and Federal Reserve Chairman Jerome Powell’s second day of testimony. What happened to the benchmarks?
Today, the Dow Jones Industrial Average DJIA, +0.15% gained 53.79 points, or 0.15 percent, to 34,987.02.
The S&
Today, the Nasdaq Composite COMP, -0.70 percent dropped 101.82 points, or 0.70 percent, to 14,543.13.
The Dow Jones Industrial Average increased 44.44 points, or 0.1 percent, to 34,933.23; the S&P 500 index rose 5.09 points, or 0.1 percent, to 4,374.30; and the Nasdaq Composite Index fell 32.70 points, or 0.2 percent, to 14,644.95.
What caused the market to rise? After a batch of mainly optimistic economic statistics, including a drop in new unemployment benefit applications to a new historic low, stocks initially struggled to find direction. In the seven days ending July 10, initial jobless claims declined by 26,000 to 360,000, matching the prediction of analysts polled by The Wall Street Journal. Global economic statistics was also in the spotlight, with China’s GDP increasing at a still-impressive 7.9% year-on-year in the second quarter. That was down from the previous quarter’s 18.3 percent increase, which was exacerbated by the fact that the world’s second-largest economy closed factories, markets, and offices to combat the coronavirus in early 2020. Powell told the Senate Banking Committee that inflation has risen significantly and will likely remain high for a few months before reducing, repeating his warning from the previous day when he spoke before a House panel. Powell said Wednesday that the central bank was not in a rush to reduce its monthly purchases of Treasurys and mortgage-related assets, which are currently at $120 billion, citing expectations that pricing pressures will eventually fade, and that the economy was still “a long way off” from meeting the Fed’s self-described goals of “substantial further progress.” Powell’s comments suggested that fears of a “hawkish shift in tenor” at the Fed’s June policy meeting were exaggerated, according to Andrew Schneider, a US economist at BNP Paribas. “While the Fed has begun ‘considering’ tapering, we believe it remains committed to a cautious and gradual policy approach, with the Fed primarily embracing indicators of more persistent inflation and labor market recovery,” he wrote. The big concern currently plaguing financial markets is how long high inflation will last. In a Thursday research note, Michael Hewson, chief market analyst at CMC Markets UK, wrote, “These nagging concerns about inflation, transitory or otherwise, have continued to dominate sentiment, while worries over the pace and persistence of rising prices appear to be tempering optimism over the wider global recovery story.” In a webcast, Chicago Fed President Charles Evans said the central bank will have a better picture of inflation’s course by the end of the year. He, like other top Fed officials, has blamed the recent rise in the cost of living on the economy’s reopening and the ensuing supply and labor constraints. Bond yields in the United States declined for the second day in a row, raising concerns that, despite inflationary fears, economic growth may have already peaked. See: Even when inflation rises, Gundlach believes there is a simple reason why Treasury yields are so low. The Philadelphia Fed’s factory index decreased to 21.9 in June from 30.7 the previous month, according to other economic data. Separately, the Empire State Index of the New York Fed rose 25.6 points to a new high of 43 in July. According to a poll conducted by The Wall Street Journal, economists projected a reading of 17.3. Any reading above zero on each index implies that things are getting better. The Federal Reserve said Thursday that industrial production in the United States increased by 0.4 percent in June, but a scarcity of semiconductors contributed to a 6.6 percent reduction in vehicle and part manufacturing. Industrial output increased 0.8 percent in the month, excluding vehicles. Meanwhile, the proliferation of the coronavirus delta strain was causing concern on Wall Street. The “delta variation is spreading, people are dying, we can’t actually just wait for things to get more rational,” Dr. Francis Collins, head of the National Institutes of Health, told CNN on Wednesday. According to a tracker from the Centers for Disease Control and Prevention, the US immunization program has slowed, with 48.2 percent of the population fully immunized. Which businesses were the subject of the investigation?
Netflix Inc. NFLX announced its first significant videogame hire, presumably signaling a move beyond its streaming-video roots, while GameStop Corp. shares GME fell 0.5 percent.
AMC Entertainment AMC, +7.69 percent, a fellow meme stock, fared much better, trimming its monthly losses by snapping a five-day losing skid to close up 7.7%.
Morgan Stanley MS, +0.18% saw its stock rise 0.2 percent after the brokerage and money management firm announced earnings and revenue that exceeded expectations, but trading revenue that fell short of projections.
UnitedHealth Group Inc. (UNH) saw its stock rise 1.3 percent after the healthcare provider announced better-than-expected second-quarter profit and revenue and improved its full-year estimate, although continuing to expect COVID-19 to eat into results.
Ross Stores Inc. ROST announced late Wednesday that Chief Financial Officer Travis Marquette has resigned with immediate effect to pursue a position with an unnamed company. Nearly 1% of the stock’s value was lost.
What happened in other markets?
The 10-year Treasury note yield TMUBMUSD10Y, 1.299 percent, dropped 4.2 basis points to 1.303 percent. Bond prices and yields move in opposite directions.
The ICE U.S. Dollar Index DXY, +0.19%, which measures the currency against a basket of six main competitors, was up 0.2 percent.
Oil prices fell 2.2 percent, with the US benchmark CL00, -2.28 percent, while gold futures GC00, +0.30 percent rose $4, or 0.2 percent, to $1,829 an ounce.
In European shares, the Stoxx Europe 600 SXXP, -0.95 percent sank 0.9 percent, while London’s FTSE 100 UKX, -1.12 percent fell 1.1 percent.
In Asia, the Shanghai Composite SHCOMP, +1.02 percent gained 1%, the Hang Seng Index HSI, +0.75 percent gained 0.8 percent, and Japan’s Nikkei 225 NIK, -1.15 percent dipped 1.2 percent./n
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