MARKET SNAPSHOT
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New York Stock Exchange
US stocks ended lower on Wednesday, a day after the S&P 500 index broke its first record close in six months, while the minutes of the Federal Reserve meeting in July showed staff their forecast for economic growth for the rest of 2020 and stressed the need for more fiscal assistance in the wake of the coronavirus pandemic.
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What about benchmarks for stocks?
The Dow Jones Industrial Average (DJIA) fell 85.19 points, or 0.3 percent, to close at 27,692.88, while the S&P 500 (SPX) fell 14.93 points, or 0.4 percent, to close at 3,374. , 85, after setting an intraday record of 3,399.54. The Nasdaq Composite Index (COMP) fell 64.38 points, or 0.6%, to close at 11,146.46, after setting a new intraday record of 11,257.42.
The Russell 2000 Small Cap Index (RUT) closed 0.2% higher, extending a range of performance it has risen 6.7% in the past month.
On Tuesday, the Dow slipped 66.84 points, or 0.2%, to close at 27,778.07. The S&P 500 index gained 7.79 points, or 0.2%, and ended at a record 3,389.78, its first all-time high since February. 19. The Nasdaq Composite Index added 81.84 points to reach 11,210.84, also close to a record and its 34th of the year.
What drove the market?
Stock indices fell after the Federal Reserve published minutes of its July meeting, at which staff cut their forecast for economic growth for the rest of the year, highlighting the need to support vulnerable families and the wider economy during the additional fiscal stimulus pandemic .
The Fed Minutes recognized previous warnings from Fed Chairman Jerome Powell about the major downside risks to the economy that remain associated with the trajectory of the pandemic.
“For us, this strongly suggests that both monetary and fiscal policy support will continue to be required for recovery to stay on course,” said Bob Miller, head of BlackRock of Americas’ Fundamental Fixed Income, in a note.
In an interview with Politico, Democratic House Speaker Nancy Pelosi said she would be willing to resume negotiations and consider a compromise on another coronavirus relief package, adding $ 600 a week in additional unemployment benefits. the end of last month passed. lurch.
Earlier in the session Wednesday, stocks received a lift from healthy earnings reports from leading retailers. Target Corp. (TGT) reported a record-breaking second quarter early Wednesday, with similar sales up a record 24.3%, and digital similar sales nearly doubling, up 195%. Also retailer for home improvement Lowe’s Cos. (LOW) reported fiscal gains and sales in the second quarter that were well above expectations, boosted by a consumer focus on repair and maintenance activities during the pandemic.
“Part of the reason why retail sales have been so strong is fiscal relief that helped the recovery story,” said Matt Stucky, a portfolio manager at Northwestern Mutual, pointing to the recent dip in reported US COVID 19 cases, corporate profits that beat harsh forecasts, and the positive effects of government pandemic assistance.
“But there is still a massive need for fiscal relief for those who rely on these benefits to pay their bills and meet their needs,” he told MarketWatch.
Amid a still weak labor market, a decline on Wall Street could come from one of a number of sources, including slow progress on further fiscal stimulation of coronavirus in Congress, rising Sino-American tensions, a disputed election in November, and more.
This drives a bifurcation not only between highflying tech sectors and the rest of the stock market, but also in asset classes. “It looks like the stock, credit and tariff markets are completely disconnected,” said Nancy Davis, chief investor at Quadratic Capital, in an email. “The stock and credit markets are looking past the pandemic and are already pricing in a strong recovery with record highs in the S&P 500, the Nasdaq and credit markets. On the other hand, the rates are market prices for the end times. ”
Next read: There will be no V-shaped recovery for consumer sentiment, DataTrek says
On the international front, President Donald Trump announced that he would be ready to drop a phase-one agreement between the US and China if hostility between the two sides ratchets up higher. Separately, U.S. universities and colleges have been warned by the State Department that they must divide Chinese supplies, prior to a potential revaluation of those companies, Bloomberg wrote.
Which stock was in focus?
- Shares of Momenta Pharmaceuticals Inc. (MNTA) was 69.2% on Wednesday, after the biotechnology company announced an agreement to be acquired by Johnson and Johnson (JNJ) in a deal valued at $ 6.5 billion.
- President Donald Trump on Tuesday supported Oracle Corp. (ORCL) to buy the US operations of TikTok, adding a fresh wrinkle to the bid for the Chinese-owned video-sharing app, whose parent ByteDance is also in negotiations with Microsoft Corp. (MSFT) on a possible acquisition that also appears to be distinguished by the President.
- Apple Inc. (AAPL) shares rose 0.1%, ending just ashamed of a market capitalization of $ 2 trillion just two years after reaching $ 1 trillion.
- Advance Auto Parts Inc. (AAP) scored a set of price increases, with JP Morgan raising its forecast to $ 183, and Credit Suisse and Wedbush hitting their target to $ 180. Shares fell 1.3%.
- TJX (TJX)on Wednesday, sell-offs reported analysts expecting slightly sharper but a deeper per-share loss than Wall Street had expected. Shares fell 5.4%.
- Purpose (TGT) shares grew 12.7% after the big-box retailer reported better-than-expected results for the quarter, including a 24.3% in shoppers of the same store counting on household items under orders of residence- back home.
- Lowe’s (LOW) shares gained 0.2% after the hardware store chain’s financial results estimated estimates as people continue to improve their homes during the pandemic.
- Walmart Inc. (WMT)remains in focus after the stores with large boxes reported revenue and revenue that hit the consensus. Sales from the same store in the US increased 9.3% with general merchandise and food leading the way. Shares fell 1.7%.
- Occidental Petroleum Corp (OXY) shares rose 0.9% after announcing on Wednesday agreements to sell their Wyoming, Colorado and Utah land leases for $ 1.33 billion to Orion Mine Finance.
How have other brands traded?
Overnight in Asia, the CSI 300 index of China (XX: 000300) closed 1.5% lower, while Hong Kong’s Hang Seng index (HK: HSI) fell 0.7%. Japanese Nikkei 225 (JP: NIK) added 0.3%.
In Europe, the Stoxx 600 Europe Index (XX: SXXP) closed 0.7% higher and the UK’s FTSE 100 (UK: UKX) added 0.6%.
The yield on the 10-year Treasury note (BX: TMUBMUSD10Y) rose less than a basis point to 0.674%. Bond prices move upside down to yields.
Gold prices for delivery in December (GCZ20) tumbled 2.1%, to settle at $ 1,970.30 an ounce. U.S. crude oil prices (CLU20) rose 4 cents higher, by 0.1%, to $ 42.93 a barrel after an industry group reported a decline in inventories.
The ICE US Dollar Index, (DXY) a meter from the buck against half a dozen major rivals, jumped 0.8% to 93.00.
Mark DeCambre contributed reporting
Video: Fed: will finalize a long-range strategy (CNBC) in the very near future
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