Big gains in crude boost energy stocks
U.S. stocks ended almost on a flat note on Thursday, 18 August 2016. Indices logged a modest return in a trading session marked by relatively muted moves for the main benchmarks as investors pored over a batch of upbeat economic data and digested signs that the Federal Reserve remains divided about the timing of the next interest-rate hike. A rise in oil prices, which pushed West Texas Intermediate crude trading on the New York Mercantile Exchange , the U.S. benchmark, helped nudge energy stocks up.
The Dow Jones Industrial Average rose 23.76 points, or 0.1%, at 18,597.70. The S&P 500 index was up 4.80 points, or 0.2%, to close at 2,187.02. The tech-heavy Nasdaq Composite Index was up 11.49 points, or 0.2%, at 5,240.15. The S&P 500 index was up 4.80 points, or 0.2%, to close at 2,187.02.
Seven out of the S&P 500's 10 sectors finished in the green, with a decline in telecommunications, limiting the run-up in oil-and-gas stocks. Dow component Wal-Mart Stores was up 1.9%, giving the blue-chip gauge a lift, while a 1.2% slide in Caterpillar shares limited the benchmark's advance. Wal-Mart reported better-than-expected profit and revenues on Thursday.
Shares in Cisco Systems fell after the maker of networking equipment late Wednesday reported better-than-expected earnings and said that it plans to cut 5,500 jobs. Dow components Exxon Mobil and Chevron ended with gains of 0.9% and 1.3%, respectively.
Equity indices struggled for direction as investors continued to adjust rate hike expectations for the year. Yesterday's release of the FOMC minutes for July indicated that Fed officials were divided on whether or not an interest rate hike would be appropriate in coming months. Specifically, concerns about the sustainability of recent hiring trends and consistently weak inflation readings compelled some members to hold off on raising rates.
The stock market ended a range-bound day on a flat note as caution prevailed despite yesterday's dovish FOMC minutes from the July meeting. Equity indices struggled for direction as investors continued to adjust rate hike expectations for the year. Yesterday's release of the FOMC minutes for July indicated that Fed officials were divided on whether or not an interest rate hike would be appropriate in coming months. Specifically, concerns about the sustainability of recent hiring trends and consistently weak inflation readings compelled some members to hold off on raising rates. On Thursday, San Francisco Fed President John Williams said he would like to see another interest rate increase sooner rather than later.
Among other Fed speakers, New York Fed President William Dudley on Thursday was upbeat about the outlook for jobs and growth, adding that time for a rate increase is edging closer. He spoke at a morning briefing for reporters at the regional Fed's bank headquarters on Wall Street.
On the economic front, jobless claims last week fell by 4,000 to 262,000, representing a one-month low, and marking the 76th straight week that claims have been below 300,000. Meanwhile, the Federal Reserve Bank of Philadelphia's barometer of regional manufacturing activity rebounded slightly into positive territory in August.
The Conference Board on Thursday said its index of leading economic indicators rose 0.4% in July, signaling that moderate but steady growth could continue for the remainder of 2016.
Oil futures stretched their streak of gains to a sixth session in a row Thursday to settle at their highest level in nearly two monthslifting crude into a bull market. September West Texas Intermediate crude rose $1.43, or 3.1%, to settle at $48.22 a barrel on the New York Mercantile Exchange.
Data from the Energy Information Administration Wednesday showed weekly declines for both crude and gasoline inventories, prompting prices that day to settle higher for a fifth session.
Treasuries ended the day on a higher note as the short-end of the curve enjoyed a decent bid. The yield on the 2-yr note settled lower by two basis points (0.71%) while the yield on the benchmark 10-yr note slipped one basis point to 1.53%.
Today's participation was below the recent average as fewer than 737 million shares changed hands at the NYSE floor.
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