Weak financials and consumer staples shares affect momentum
U.S. stocks reversed direction to close mostly lower on Thursday, 22 June 2017 as weak financials and consumer staples shares eclipsed a rally in the health-care and biotechnology sectors. The stock market held a modest gain throughout the majority of Thursday's session, but increased selling pressure in the final hour of action dragged the major averages from their best marks of the day.
The Dow Jones Industrial Average slipped 12.74 points to end at 21,397.29. The Nasdaq Composite Index bucked the trend for a second day to edge up 2.73 points to close at 6,236.69, supported by the biotechnology advance. The S&P 500 dropped 1.11 points to finish at 2,434.50, with financial stocks falling 0.6% and consumer staples shedding 0.7%.
Equities opened Thursday's session slightly lower, but ticked up into positive territory after the Senate released its version of the healthcare reform bill. Health-care stocks were among the biggest gainers, adding 1.4%, as lawmakers released a discussion draft of the health-care bill that aims to cut Medicaid and eliminate penalties for people who don't buy insurance, among other changes.
Latest economic data at Wall Street showed that the latest weekly initial jobless claims count totaled 241,000 while the consensus expected a reading of 240,000. It was above the revised prior week count of 238,000 (from 237,000). As for continuing claims, they rose to 1.944 million from the revised count of 1.936 million (from 1.935 million). The key takeaway from this report is that it will feed expectations for another decent-sized gain in nonfarm payrolls since it encompassed the week in which the survey for the June employment report was conducted.
Separately, the Conference Board's Leading Indicators report for May increased 0.3% (consensus 0.3%) after moving higher by a revised 0.2% in April (from 0.3%). The key takeaway from the report is that strengths among the leading indicators have remained more widespread than weaknesses. Also, the FHFA Housing Price Index for April increased 0.7%, which followed a revised uptick of 0.7% (from 0.6%) in March.
Bullion prices ended higher at Comex on Thursday, 22 June 2016. Gold tallied back-to-back session on Thursday, as the precious metal tried to clamber off five-week lows struck earlier this week.
August gold added $3.60, or 0.3%, to settle at $1,249.40 an ounce after tacking on about 0.2% a day earlier. That was the highest settlement since Friday and it comes just three days after the contract finished Tuesday at its lowest since May 16. July silver gained 13.5 cents, or 0.8%, to $16.509 an ounce.
The closely watched dollar index traded little changed as gold prices closed, lessening the currency-related headwind for commodities priced in the currency, including gold. A stronger dollar tends to make assets pegged to the buck more expensive to buyers using other monetary units. U.S. equities, meanwhile, traded mostly higher after an earlier struggle for direction.
Crude oil prices finished modestly higher on Thursday, 22 june 2017 with a second weekly decline in U.S. crude supplies helping prices recoup some of their recent losses. But prices were still stuck in a bear market, defined as a decline from a recent peak of at least 20%, on lingering worries about strong domestic production growth.
August West Texas Intermediate crude advanced 21 cents, or 0.5%, to settle at $42.74 a barrel on the New York Mercantile Exchange. Brent crude for August delivery on London's ICE Futures exchange added 40 cents, or 0.9%, to $45.22 a barrel.
Prices fell on Wednesday as data from the Energy Information Administration showed a weekly climb in U.S. crude production, feeding concerns that efforts by other major producers to cut down global supplies down to a five-year average will fail. The report, however, also showed that crude stockpiles declined for a second week in a row.
U.S. Treasuries settled modestly higher across the curve with the benchmark 10-yr yield slipping one basis point to 2.15%.
Investor participation was below average as fewer than 900 million shares changed hands at the NYSE floor.
Friday's lone economic report, May New Home Sales (consensus 599,000) will cross the wires at 10:00 ET.
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