US close: Stocks close weaker despite upbeat data

dl wall street st new york city nyc nyse stock exchange ny dow jones nasdaq sp finance us usa united states of america — Wall StreetSharecast photo / Josh White

US stocks closed in negative territory on Tuesday, adding to the losses it recorded in the previous session, despite the release of a batch of better-than-expected economic data.

The Dow Jones Industrial Average ended the session down 0.96% at 31,790.87, as the S&P 500 lost 1.1% to 3,986.16 and the Nasdaq Composite was off 1.12% at 11,883.14.

“Today’s US consumer confidence survey brought a welcome boost for the Fed, with the August reading of 103.2 surprising even the most optimistic forecaster,” said IG senior market analyst Joshua Mahony.

“Despite the evident fears around energy prices and inflation, the survey saw a rise in the number of those that consumers that consider conditions to be ‘good’.

“From an employment perspective, the survey saw grounds for continued optimism with just 11.4% of consumers considering jobs ‘hard to get’.”

Mahony said the theme was reiterated by a “welcome jump” in the JOLT job opening figure, which followed the CB confidence survey by also reversing the three-month downtrend to push sharply higher.

“Clearly the conditions for many have improved in August, helping to alleviate fears of a downbeat jobs report on Friday.”

Both stocks and Treasury note prices were on the back foot on Monday, following a hawkish speech from Federal Reserve chair Jerome Powell at Jackson Hole at the end of last week.

Powell said that getting back to price stability would "likely require maintaining a restrictive policy stance for some time".

But JP Morgan equity strategist Mislav Matejka was unbowed, telling clients earlier that initial weekly jobless claims running 10% above their three-month moving average had historically been associated with a recession every time.

He added that on average, the S&P 500 had tended to rise 11% over the subsequent 12 months.

In economic news, the US Department of Labor reported that job openings increased at a month-on-month pace of 1.8% in July to reach 11.24 million - well above consensus expectations for 10.3 million.

The so-called 'quits' rate, meanwhile, slipped to 2.7% in July, from 2.8% for June.

Elsewhere, the S&P Case-Shiller index tracking house prices in the 20 largest cities in the US slowed to 18.6% from a year-on-year pace of 20.5%, still higher than the 18.2% economists had pencilled in.

The FHFA's measure of national house prices did miss forecasts, however, with the annual rate of increase slipping to 17.67% in the second quarter from 18.9% over the first.

Analysts at Barclays had picked a reading of 18.0%.

Finally on data, the Conference Board's consumer confidence index improved to 103.2 from 95.3 - well above consensus expectations for 97.4, led by a rise in the sub-index tracking Americans' expectations.

On the corporate front, Best Buy was ahead 1.61% after its second-quarter revenue and profit fell less than anticipated.

On the downside, the heavily-shorted barbecue and backyard grill giant Weber tumbled 16.84% amid renewed pressure on the meme stock.

Twitter was also in focus, closing down 1.8% after Tesla chief Elon Musk sent a letter to formally notify the social network that he was backing out of his deal to acquire the company.

Musk cited allegations revealed by the Washington Post around “far-reaching misconduct” at Twitter, that he claimed were known to the company before 8 July but were unknown to him.

The South African billionaire’s bid to buy Twitter has faced criticism on many fronts, with Musk accused of setting his sights on the company after continued censorship of his oft-wayward tweets, while the deal he made to buy it out was described as far too high and much too reliant on leveraging his holding in Tesla.

Reporting by Josh White at Sharecast.com. Additional reporting by Alexander Bueso.

Dow Jones - Risers

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