Tech heavy Nasdaq lags
U.S. stocks closed mostly higher on Wednesday, 19 September 2018 as investors took escalating trade tensions in stride to instead focus on improving economic fundamentals even as a weak technology sector hobbled the Nasdaq.
The Dow Jones Industrial Average gained 158.80 points, or 0.6%, to 26,405.76. The S&P 500 added 3.64 points, or 0.1%, to 2,907.95, within 0.3% of its record. Financials were the best performing stocks, rallying 1.8% as the 10-year Treasury yield rose to 3.081%. The Nasdaq Composite Index bucked the trend to fall 6.07 points to 7,950.04.
Trading on Wall Street has been relatively subdued now that earnings season is largely over and there have been few major economic indicators released this week. That has left an opening for markets to be driven by the latest developments on trade.
Wednesday's mixed outing followed an unexpected rebound on Tuesday, which came after the U.S. announced a $200 billion tranche of tariffs on Chinese goods, to which Beijing responded with $60 billion in retaliatory duties. Asian shares rallied for the second day in a row on Wednesday, with China's Shanghai Composite climbing 1.1%.
Trade talks between the United States and Canada resumed in Washington on Wednesday.
Reviewing Wednesday's economic data, it included August Housing Starts and Building Permits, the Q2 Current Account Balance, and the weekly MBA Mortgage Applications Index. Housing starts rose to a seasonally adjusted annualized rate of 1.282 million units in August (consensus 1.229 million), up from a revised 1.174 million units in July (from 1.168 million). Building permits declined to a seasonally adjusted 1.229 million in August (consensus 1.310 million) from a revised 1.303 million in July (from 1.311 million). The key takeaway from the report is that permits (a leading indicator) for single-family homes fell 6.1% month-over-month to 820,000, driven by declines across all four geographic regions.
Separately, the current account deficit for the second quarter totaled $101.5 billion (consensus -$103.3 billion). The first quarter deficit was revised to $121.7 billion from $124.1 billion.
The weekly MBA Mortgage Applications Index rose 1.6% to follow last week's decrease of 1.8%.
Bullion prices ened higher at comex on Wednesday, 19 September 2018. Gold futures gained on Wednesday, leaving the contract to finish above the closely watched $1,200 line for a seventh straight session.
December gold rose $5.40, or nearly 0.5%, to settle at a one-week high of $1,208.30 an ounce, as the dollar index flitted between small gains and losses. The dollar and gold, which is chiefly priced in the U.S. currency, tend to move inversely.
December silver rose 0.7% to $14.28 an ounce.
The dollar index was down 0.6% month to date, trimming its 2018 gain so far to about 2.7%.
Oil futures climbed on Wednesday, 19 September 2018 with the U.S. benchmark settling at its highest since July after a government report revealed a fifth-straight weekly decline in U.S. crude inventories. The decrease in supplies was smaller than the market expected, but it contradicted the increase reported by a trade group on Tuesday. Traders also weighed expectations for lower global output due to impending U.S. sanctions on Iran, as well as the prospects for energy demand on the heels of a worsening trade dispute between the U.S. and China.
The U.S. benchmark, October West Texas Intermediate crude rose $1.27, or 1.8%, to settle at $71.12 a barrel on the New York Mercantile Exchange, the highest for a front-month contract since July 10.
November Brent, the global benchmark, added a more modest 37 cents, or 0.5%, to finish at $79.40 a barrel on ICE Futures Europe, a day after posting a climb of 1.3%.
The Energy Information Administration reported Wednesday that U.S. crude supplies fell by 2.1 million barrels for the week ended Sept. 14. The EIA had reported declines in each of the previous four weeks. Gasoline stockpiles declined by 1.7 million barrels for the week, while distillate stockpiles climbed by 800,000 barrels. Market had expected for supply declines of 1.6 million barrels for gasoline, and 282,000 barrels for distillates, which include heating oil.
Looking ahead, investors will receive several pieces of economic data on Thursday, including weekly Initial Claims, the Philadelphia Fed Index for September, Existing Home Sales for August, and the Conference Board's Leading Economic Index for August.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
