Energy, consumer discretionary and industrial sectors set the pace
U.S. stocks closed higher on Wednesday, 28 August 2019 but remained lower for the month amid continued volatility induced by the inverted U.S. Treasury yield curve, as well as by the U.S.-China trade war, and the threat of a no-deal Brexit. The gains for U.S. stocks came on late August low-volume trading heading into the U.S. Labor Day holiday weekend, even though investors hopes for a resolution to the U.S.-China trade dispute are fading and falling bond yields are reflecting fears of a potential economic downturn.
The Dow Jones Industrial Average rose 258.20 points, or 1.0%, to close at 26,036.10, while the S&P 500 added 18.78 points, or 0.7%, to finish at 2,887.94. The Nasdaq Composite Index gained 29.94 points, or 0.4%, to end at 7,856.88.
Ten of the 11 S&P 500 sectors finished the day in positive territory. Energy, consumer discretionary and industrial set the pace, while the utilities sector was the lone holdout.
Wednesday's session didn't include any market-moving news or notable economic data, and it was mostly quiet on the U.S.-China trade front. In turn, there was an early fixation on the Treasury market, where the continued decline in yields fed into concerns about economic and corporate earnings growth.
Separately, Tropical Storm Dorian strengthened into a hurricane as it threatened to make its way toward Puerto Rico. Many of the insurance stocks underperformed throughout the day.
The yield on the 10-year Treasury note fell a further 2.8 basis points to 1.4568% after ending at its lowest since 2016 on Tuesday and moving within striking distance of its all-time low near 1.36%.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which declined 6.2% following a 0.9% decline in the prior week.
The dollar index rose 0.3% on Wednesday.
Precious metals ended on a mixed note on Wednesday, 28 august 2019 at Comex. Gold futures turned lower on Wednesday, after the sharp rally in the past month to the highest levels since 2013, discouraged some potential buyers who are now waiting for a dip or some consolidation in prices in order to invest.
Gold for December delivery on Comex fell $2.70, or 0.2%, to settle at $1,549.10 an ounce. September silver added 16.5 cents, or 0.9%, to $18.318 an ounce. The more actively-traded December silver contract added 15.8 cents, or 0.9%, to end at $18.456the highest finish for a most-active contract since April 2017.
Crude oil futures posted a gain on Wednesday, 28 August 2019 at Nymex after U.S. government data reported a weekly drop in U.S. crude suppliesthe largest in five weeksalong with declines in petroleum products, which helped to ease concerns about a slowdown in demand.
West Texas Intermediate crude for October delivery, the U.S. benchmark, rose 85 cents, or 1.6%, to settle at $55.78 a barrel on the New York Mercantile Exchange. Prices settled at their highest in just over a week, but off the session's high of $56.75. October Brent crude, the global benchmark, added 98 cents, or 1.7%, at $60.49 a barrel on ICE Futures Europe.
Wednesday's rise in crude-oil prices followed a Tuesday rally that saw the U.S. benchmark up more than 2%, buoyed in part by data that showed compliance with production curbs agreed to by members of the Organization of the Petroleum Exporting Countries and their non-OPEC allies hit 159% in July, its highest so far this year.
The Energy Information Administration on Wednesday reported that U.S. crude supplies fell by 10 million barrels for the week ended 23 August 2019. That was the biggest one-week decline reported by the government agency since the 10.8 million-barrel fall for the week ended July 19. Market had expected a decline of 4.7 million barrels. The EIA data also showed that gasoline and distillate inventories each fell by 2.1 million barrels last week. Market had shown expectations for a supply decline of 530,000 barrels for gasoline and distillates, which include heating oil, were expected to have climbed by 700,000 barrels.
Looking ahead, investors will receive the following data on Thursday: the advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for July; the second estimate for second-quarter GDP; Pending Home Sales for July; and the weekly Initial and Continuing Claims report.
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