Stocks give up earlier gains
U.S. stocks closed near unchanged on Thursday, 19 September 2019 giving up early gains scored following better-than-expected housing and manufacturing data a day after the second interest rate cut of 2019 by the Federal Reserve. Friday is quadruple witching day for U.S. markets. That's when the quarterly expiration of futures and options on indexes and stocks occurs on the same day, sometimes spurring volatility.
The Dow Jones Industrial Average fell 52.29 points, or 0.2%, to end at 27,094.79, while the S&P 500 index clung to a gain of 0.09 point, or less than 0.1%, to close at 3,006.82. The Nasdaq Composite Index added 5.49 points, or 0.1%, finishing at 8,182.88.
A report on the U.S. housing market and manufacturing data in the Philadelphia area helped to hearten investors about the state of the U.S. economy on Thursday.
Existing-home sales rose 1.3% in August from the previous month to a seasonally adjusted annual rate of 5.49 million, the National Association of Realtors said, marking the strongest pace of sales since March of last year.
And the Philadelphia Federal Reserve's manufacturing index fell to 12.0 in September after registering a reading of 16.8 in August, but was above forecasts for a reading of 10. Any reading above zero indicates improving conditions.
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The Fed cut interest rates by a quarter percentage point to a range of 1.75% to 2% on Wednesday afternoon, as expected. However, three of the 10 members of the rate-setting Federal Open Market Committee dissented, marking the highest number of dissenters since 2016, and raising doubts that the FOMC would deliver further hoped-for cuts to benchmark rates this year or kick off a new round of bond buying.
Meanwhile, the New York Federal Reserve held its third repurchase auction in as many days on Thursday, injecting a further $75 billion into the financial markets by buying securities from Wall Street dealers, an attempt to keep short-term rates from soaring due to a lack of liquidity
On the international trade front, Chinese and U.S. delegates are meeting Thursday and Friday ahead of higher-level meetings expected early October to resolve the yearlong trade dispute.
Elsewhere in economic reports, U.S. initial jobless claims rose 2,000 to 208,000 in the seven days ended Sept. 14. Claims fell a revised 13,000 to 206,000, a nearly five-month low, in the prior week.
In commodities, oil futures rose on concerns that Saudi production will be slow to return after last Saturday's attacks. Gold fell, while the U.S. dollar, as measured by the ICE U.S. Dollar Index, a gauge of the buck against a basket of leading rivals, receded by 0.2%.
Bond yields rose Thursday afternoon. The 10-year U.S. note increased by one basis point, to 1.79%, while the 2-year note were unchanged at 1.75%.
Investors will not receive any notable economic data on Friday.
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