US close: Dow snaps three-day losing streak

dl exchange place wall st street pl new york city nyc ny nyse stock exchange dow jones sp nasdaq finance dollar dollars us usa united states of america — Exchange PlaceSharecast photo / Josh White

Wall Street’s main indices managed a positive finish on Wednesday with the Dow snapping its three-day losing streak, as investors looked ahead to the Fed’s Jackson Hole summit on Thursday.

The Dow Jones Industrial Average ended the session up 0.18% at 32,969.23, as the S&P 500 added 0.29% to 4,140.77 and the Nasdaq Composite was ahead 0.41% at 12,431.53.

“Volatility was low in stock markets today, as a bit of bargain hunting pushed up equities in Europe and the US,” said Equiti Capital market analyst David Madden.

“Given the relatively small recovery from Tuesday’s losses, it appears that buying appetite is not in great supply.

Dealers remain a little concerned for the health of the global economy.”

Madden noted that the S&P 500 was up, even though the US 10-year Treasury yield hit its highest level in eight weeks early in the session.

“Recently, rises in bond yields have prompted a sell-off in equities, but not today, perhaps, the fears of rising yields are no longer having the impact they once had.”

On the economic front, new orders for long-lasting goods undershot economists' forecasts in July, partly as an expected surge in civilian aircraft orders failed to materialise.

According to preliminary data from the Department of Commerce, durable goods orders were unchanged last month at $273.5bn, against market expectations for a 0.6% improvement.

Helping to offset the shortfall, the rise in total orders for June was revised higher by 20 basis points, to 2.2%, while excluding transportation, orders increased by 0.3%, beating the consensus for growth of 0.1%.

“The most important number in the report, nondefense capital goods orders ex-aircraft, rose a modest 0.4%, but the May and June orders were revised up, by a total of 0.4%,” noted Ian Shepherdson at Pantheon Macroeconomics.

“The trend is still rising at a decent pace, though it has slowed since the turn of the year.”

Shepherdson said orders were “hugely outperforming” the ISM manufacturing survey, with the gap widening in recent months.

“This might just be a question of lags, or it might be mirroring the story in the consumer sector, where people report to surveys that they are miserable and anxious about the state of the economy, but they keep spending anyway because the huge pile of pandemic savings allows them to cushion the hit to their real incomes from high inflation.

“Businesses’ excess cash piles likely are still north of $700bn.”

Elsewhere, pending home sales were down 1% in July, beating consensus forecasts for a fall of 2.8%, according to the National Association of Realtors.

The new data meant pending sales were now 27% below their most recent peak in October, as demand for mortgages falls as interest rates rise.

“Mortgage demand appears to be stabilising now that rates are no longer rising - our August estimate based on the available weekly data is broadly unchanged,” explained Pantheon’s Ian Shepherdson.

“Accordingly, home sales will likely reach a floor before the end of the year, but no recovery is in sight.”

In the past two months, Shephedson said existing home sales had fallen below the level implied by pending sales, presumably because a larger proportion of buyers than usual had pulled out of transactions.

“If this continues, existing home sales will dip a bit further in August.

“But whatever happens to sales, home prices have much further to fall.”

In equities, fashion retailers were in focus amid headlines from two of the bigger players, with Nordstrom tanking 19.96% after it lowered its sales and profit expectations for the year.

The high-end department store chain blamed a recent drop in footfall for the move, particularly at its off-price Nordstrom Rack brand, even though it beat second-quarter expectations.

On the upside, Urban Outfitters reversed earlier losses to close up 1.88%, even after its quarterly earnings failed to meet investors’ expectations in an after-hours announcement on Tuesday.

Home goods retailer Bed Bath & Beyond surged 18% after the Wall Street Journal reported that the beleaguered firm had secured a loan deal to help shore up its cash.

Peloton Interactive rocketed 20.36% after it announced it had inked a deal to sell its exercise bikes and other gear through e-commerce giant Amazon.

Reporting by Josh White at Sharecast.com.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $180.01 2.28%
Boeing Co. (BA) $163.60 2.21%
Walt Disney Co. (DIS) $116.41 1.35%
American Express Co. (AXP) $159.13 1.14%
Chevron Corp. (CVX) $163.19 0.74%
Walmart Inc. (WMT) $134.97 0.72%
Nike Inc. (NKE) $111.41 0.66%
Goldman Sachs Group Inc. (GS) $342.45 0.52%
Home Depot Inc. (HD) $308.19 0.39%
JP Morgan Chase & Co. (JPM) $115.80 0.24%