Nasdaq ekes out a small gain helped by Apple shares
US stocks ended a quiet midweek session on Wednesday, 07 September 2016 on a flat note on as participants employed some caution ahead of tomorrow's policy statement from the European Central Bank. The tech-heavy Nasdaq settled slightly ahead of the S&P 500 and the Dow Jones Industrial Average. The major averages rose at the start of the session, responding to a positive bias in European markets. Regional bourses ended in the green as investors examined a mixed set of economic data ahead of tomorrow's policy decision from the ECB. The central bank is scheduled to release its September rate decision at 7:45 ET while ECB President Draghi is scheduled to offer remarks at 8:30 ET.
The Dow Jones Industrial Average lost 12 points, or 0.1%, to finish at 18,526. The tech-heavy Nasdaq Composite Index rose 8 points, or 0.2%, to a record close of 5,283.93. S&P 500 ended down less than a point at 2,186.15.
Dow was pressured by a 1.3% drop in Wal-Mart Stores and a 1% loss in Home Depot partly offset by a 2% gain by Caterpillar.
Equity indices pulled back after the first hour as some strengthening in the U.S. Dollar Index weighed on dollar-denominated oil and the broader market. The greenback benefited from some softening in sterling, following accommodative remarks from Bank of England Governor Mark Carney. Mr. Carney addressed parliament today, indicating that post-Brexit recession risks have receded. However, the BoE governor went on to note that the central bank has further room to maneuver monetary policy, if needed.
Today's economic data included the weekly MBA Mortgage Index and the July Job Openings and Labor Turnover Survey. The MBA Mortgage Index showed that mortgage applications increased 0.9% in the week ending September 3. This followed a 2.8% gain in the prior week. The July Job Openings and Labor Turnover Survey showed that job openings came in at 5.871 million from a revised 5.643 million (from 5.624 million) in June.
The S&P 500 and the Dow lost a little ground Wednesday, after a report from the 12 Federal Reserve districts had a modestly positive tone about the economy but noted that the presidential election is making some firms cautious about expanding activity.
But the Nasdaq Composite eked out a gain and closed at a record high as tech stocks rallied, helped in part by Apple which rose 0.6% after unveiling the iPhone 7 at its flagship product event in San Francisco.
The Fed's latest beige book report, meanwhile, was viewed as providing more fodder for the central bank, as it contemplates an interest-rate increase in the near term.
Wednesday's overall muted action came after U.S. stocks logged small gains on Tuesday when a disappointing services-sector report fueled expectations the Fed won't raise interest rates at its Sept. 20-21 meeting.
San Francisco Fed President John Williams late Tuesday said he still backs a rate increase sooner rather than later, repeating comments he made before the release of the disappointing August jobs report.
On a more positive note, the Labor Department said on Wednesday that job openings soared to an all-time high of 5.9 million in July, a sign that the labor market is more fluid.
Bullion prices finished lower on Wednesday, 08 September 2016, a day after gold notched a three-week closing high as investors pared expectations for how aggressively the Federal Reserve would move to increase interest rates. The interest-rate debate continues to change with each data point and Fed speaker, including a hawkish-sounding speech late Tuesday by San Francisco Fed President John Williams.
December gold fell $4.80, or 0.4%, to settle at $1,349.20 an ounce. The contract had posted gains over the past three trading sessions. December silver lost 29 cents, or 1.4%, to $19.848 an ounce. Silver soared 4% to $20.138 an ounce a day earlier.
The ICE U.S. Dollar Index, traded about 0.2% higher on Wednesday, pressuring dollar-denominated prices of gold. But the greenback had fallen sharply on Tuesday after a report showed a drop in a U.S. service-sector index to its weakest in over six years. That report fueled speculation that the Fed could take a pass on raising interest rates later this month, although the panel may still signal the chance for a late-year rate increase.
Crude oil futures settled at their highest level in about a week on Wednesday, 07 September 2016 ahead of the latest updates on U.S. petroleum supplies, as traders weighed the likelihood that major producers will reach a deal to curb output later this month.
October West Texas Intermediate crude tacked on 67 cents, or 1.5%, to settle at $45.50 a barrel on the New York Mercantile Exchange. It posted gains over the past two trading sessions, following a four-session decline. November Brent crude on London's ICE Futures exchange rose 72 cents, or 1.5%, to $47.98 a barrel.
Prices got a boost early this week following the announcement that Saudi Arabia and Russia had agreed to cooperate to stabilize the oil market. But without a specific plan to cap output, futures prices have struggled for direction.
Treasuries ended on a flat note with yields little changed through the curve. The yield on the 2-yr note ended flat (0.73%) while the yield on the 10-yr note settled lower by one basis point (1.53%).
Today's participation was below the recent average as fewer than 803 million shares changed hands on the NYSE floor.
Tomorrow's economic data will include weekly initial claims (consensus 265k) and Consumer Credit for July (consensus $16.0 billion), which will cross the wires at 8:30 ET and 15:00 ET, respectively.
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