The technology and health-care sectors led gains
US stock market rebounded from six days of consecutive losses on Wednesday, 26 August 2015. Equity indices began the day on a higher note after index futures rallied during overnight action. That advance occurred even as China's Shanghai Composite lost 1.3%, seeing little response to yesterday's rate cut from the People's Bank of China. Once the trading day begun, the key indices spent the first three hours of action in a slow slide from their highs. The market saw little immediate reaction to comments from FOMC vice Chair William Dudley, who said that a case for a rate hike in September seems less compelling than it was a few weeks ago.
The Dow Jones Industrial Average jumped 619.07 points, or 4%, to 16,285.51, with all 30 members of the blue-chip index closing with gains. The S&P 500 SPX, +3.90% rose 72.90 points, or 3.9% higher at 1,940.51, with all of its 10 main sectors closing higher. The Nasdaq Composite ended the day up 191.05 points, or 4.2% at 4,697.54.
The technology and health-care sectors led gains.
On Wednesday, Beijing announced new stimulus measures, saying it would inject more liquidity into its sluggish economy $21.8 billion a day after announcing that it would cuts its benchmark interest rate. U.S. equities and the U.S. dollar have reacted positively to that news, which has put some pressure on gold. But in the week to date, the yellow metal has fallen about 2.9%, despite steep declines in global stock markets as investors fret about a slowdown in the world's second-largest economy.
The greenback continued climbing alongside equities into the late afternoon, pushing the Dollar Index higher by 0.7%.
On a related note, Treasuries retreated during morning action and saw a second slide in the afternoon that sent the benchmark 10-yr yield higher by 12 basis points to 2.19%.
Large cap names like Apple, Facebook and Google spiked between 5.1% and 7.7% while high-beta chipmakers also outperformed.
Economic data at US was limited to Durable Orders and MBA Mortgage Index. Durable goods orders increased 2.0% in July after increasing an upwardly revised 4.1% (from 3.4%) in June while the consensus expected a decline of 0.6%. A big reason for the upside surprise came from the automotive sector as orders for motor vehicles and parts products rose 4.0% in July after increasing 0.8% in June.
Aircraft orders, which were expected to push overall durable goods orders into negative territory, declined a relatively modest 7.8%. That drop was easily offset by the aforementioned increase in motor vehicle orders. Excluding transportation, durable goods orders increased 0.6% in July after increasing an upwardly revised 1.0% (from 0.6%) in June while the consensus expected an increase of 0.4% The weekly MBA Mortgage Index ticked up 0.2% to follow last week's 3.6% increase.
Bullion metals ended lower at Comex on Wednesday, 26 August 2015 at Comex. Gold futures settled Wednesday at their lowest level in just over a week after falling for a third straight session, as a jump in U.S. equities and strength in the dollar lured investors away from the precious metal. The metal also fell on the back of data showing a rise in July U.S. durable-goods orders, which may raise the prospects for an interest-rate hike by the Federal Reserve, which in turn could lift the U.S. dollar and pressure dollar-denominated gold prices.
Gold for December delivery fell $13.70, or 1.2%, to settle at $1,124.60 an ounce on Comex on the heels of the losses in the past two sessions. September silver futures lost 57 cents, or 3.9%, to $14.04 an ounce. They slid as far as $13.91 extending its losses this week to 8.1%.
Crude prices fell on Wednesday, 26 August 2015 at Nymex. Futures prices for oil fell despite data showing a weekly decline in crude inventories. Gasoline futures dropped nearly 6% on Wednesday, following the restart of a key refinery and an unexpected increase in U.S. supplies. Investors also remained cautious amid volatile financial markets and continued uncertainty over China's growth outlook, though oil had managed to find some support earlier Wednesday from China's recent easing measures.
October West Texas Intermediate crude shed 71 cents, or 1.8%, to settle at $38.60 a barrel on the New York Mercantile Exchange, after trading as high as $39.86.
Early Wednesday, the U.S. Energy Information Administration reported that crude stockpiles fell 5.5 million barrels for the week ended 21 August 2015. Market had forecast a rise of 1.9 million barrels. As per EIA, gasoline supplies rose by 1.7 million barrels contrary to the analyst forecast for a 1.4 million-barrel decline. Distillate stockpiles, which include heating oil, climbed 1.4 million barrels last week, about double what analysts were expecting.
Today's participation was well above average with more than 1.25 billion shares changing hands at the NYSE floor.
Tomorrow, weekly Initial Claims (consensus 275K) and the second estimate of Q2 GDP (consensus 3.1%) will be released at 8:30 ET while the Pending Home Sales report for July (expected 1.0%) will cross the wires at 10:00 ET.
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