U.S. stock indexes closed mostly higher Wednesday, with the S&P 500 index sweeping to a record close but the Nasdaq Composite ended lower, in the final session of the month and first half of the year.
The three major U.S. stock indexes recorded the best first-half year performance since 2019, according to Dow Jones data.
How did stock benchmarks perform?
-
The Dow Jones Industrial Average
DJIA,
+0.61%
closed 210.22 points higher at 34,502.51, a gain 0.6%. -
The S&P 500 index
SPX,
+0.13%
rose 5.70 points, or 0.1%, to end at a record 4,297.50, buoyed by an advance in consumer staples
XLP,
+0.78% ,
discretionary
XLY,
+0.08%
and energy
XLE,
+1.24%
sectors. -
The Nasdaq Composite Index
COMP,
-0.17%
shed 24.38 points, or 0.2%, finishing at 14,503.95.
On Tuesday, the S&P 500 notched its 33rd record close of 2021, adding 1.19 points, or less than 0.1%, to 4,291.80; the Nasdaq Composite advanced 27.83 points, or 0.2%, to a record close of 14,528.33, its 19th record of the year. The Dow closed up 9.02 points, or less than 0.1%, to 34,292.29.
For the month, the Dow slipped 0.1%, the S&P 500 advanced 2.2% and the Nasdaq Composite tacked on 5.5%.
In the year’s first-half, the Dow surged 12.7%, the S&P 500 14.4%, and the Nasdaq Composite 12.5%, marking the best six months of gains to start a year since 2019.
What drove the market?
The Dow made up more lost ground on Wednesday, helped along by a boost from shares of Boeing Co.
BA,
as well as financials and consumer staples.
Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said Boeing got an boost from recent news that airlines were buying more planes, a bet on a travel recovery.
But bigger picture, Pavlik also thinks growth stocks looked poised for further gains as 10-year Treasury yields slip further below 1.5%, and as investors potentially rethink where the U.S. might be sitting in terms of its economic expansion.
“At least in my mind, the economy may be a little bit further along in the economic cycle than a lot of people think,” Pavlik told MarketWatch. “I see it as mid- or past-mid-cycle.”
“If that’s the case,” he said, the Federal Reserve “won’t have the ability to make all of those rate hikes people are thinking may be coming.”
The recent rally in equities has been at least partly fueled by easing fears about the pace of inflation as the economy recovers from the COVID pandemic.
In economic data, a monthly report on U.S. private-sector employment that showed that 692,000 jobs were added in June, setting the stage for the more closely followed Labor Department report on Friday.
The Automatic Data Processing Inc.
ADP,
had been expected to show that the U.S. added 550,000 private-sector jobs in June, according to a consensus of forecasts from economists surveyed by Dow Jones and MarketWatch, following a 978,000 gain in May.
The June report said that hiring grew the most in the hospitality sector, which increased by 332,000. But the May employment count was reduced to 882,000 from the initially reported 978,000, though that still left it as the best month since September 2020.
“The private-sector payrolls may have beat the mark this month, but keep in mind it’s much lower than the downwardly revised number from May,” wrote Mike Loewengart, director investment strategy at E-Trade Financial in emailed commentary Wednesday.
Employment has become a major focus for markets as investors try to determine how improvements in the labor market could influence the Fed’s policy plans.
Late Tuesday, Federal Reserve Gov. Christopher Waller told Bloomberg TV that the “unemployment rate would have to drop fairly substantially, or inflation would have to really continue at a very high rate, before we would take seriously a rate hike in 2022,” but added that he is not ruling out such a move, noting that it is appropriate to think about scaling back the Fed’s monthly purchases of $120 billion in assets, starting with a reduction of $40 billion in mortgage-backed securities.
Separately, a measure of business conditions in the Chicago region rose at a slightly slower pace in June, one month after reaching its highest level in 47 years, a trade group said Wednesday. The Chicago Business Barometer, also known as the Chicago PMI, fell to 66.1 in June from 75.2 in the prior month, which had been the highest reading since December 1983. The June reading is the lowest since February.
The surge in U.S. home prices during the pandemic also has been a key focus. A report on pending home sales rose 8% in May compared with April, the National Association of Realtors reported Wednesday. Economists polled by MarketWatch had projected a 1% decrease for pending home sales in May.
The update followed the latest S&P CoreLogic Case-Shiller National Home Price Index, which showed that prices surged at their fastest pace ever in April, as buyers competed for a limited number of homes.
The national home price index recorded an increase of 14.6% over the past year, representing the highest reading since in the more than 30 years of S&P CoreLogic Case-Shiller data. The separate 20-city index, which gauges home prices across a group of major cities across the country, increased at over the past year by 14.9% in April, well past the 13.3% growth recorded the month prior.
“These are growth rates that rival the bubbliest years of the mid-2000s housing boom!” wrote analysts at BCA Research.
See also: In loaded week of IPOs, Chinese ride-hailing giant Didi is the biggest, but the stock fizzles after initial pop
Which companies were in focus?
- General Mills Inc. GIS saw sales and earnings drop in its latest quarter as people failed to buy as much food for the home as they did in the early days of the pandemic. Share rose 1.5%.
- Xometry Inc. XMTR, an AI-driven marketplace for on-demand manufacturing, saw shares nearly double on its initial public offering debut, after the IPO priced at $44 a share, above its proposed price range of $38 to $42.
- LegalZoom.com Inc. LZ, shares also jumped on its initial public offering, which priced at $28 a share, above its proposed price range of $24 to $27 each.
-
Broadband provider Wow Internet, Cable & Phone WOW said Wednesday it has entered two agreements to sell five service areas for a total of $1.8 billion. Shares popped 13.5%.
- Torrid Holdings Inc. CURV, a direct-to-consumer provider of plus-size women’s clothing, upsized its planned initial public offering on Wednesday, with plans to offer 10 million shares priced at $18 to $21 each, up from an earlier plan to offer 8 million shares.
- Luckin Coffee Inc. LKNCY stock jumped 22.1% Wednesday trading after the Chinese-based coffee purveyor released its restated fourth-quarter 2019 financial results.
- Sinovac Biotech Ltd. SVA, said Wednesday that a Phase 1/2 clinical trial of its COVID-19 vaccine in children and adolescents between the ages of 3 and 17 demonstrated that the shot is safe and produced a strong antibody response, according to a study published Monday in the medical journal The Lancet Infectious Diseases.
- ConocoPhillips COP shared rose 3.1% after it detailed plans Wednesday to add $1 billion to its share buyback program for 2021, boosting its planned distributions to shareholders for the year to about $6 billion, or 7% of its current market cap.
How did other assets fare?
-
The the 10-year Treasury note TMUBMUSD10Y yield fell 3.6 basis points to 1.443%, tumbling 14.9 basis points for the month, its biggest monthly drop since March 2020. Yields and debt prices move in opposite directions.
-
The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.3%.
-
Oil futures closed higher, with the U.S. benchmark CL00 up 0.7% to settle at $73.47 a barrel. Gold futures GC00 rose 0.5%, closing at $1,771.60 an ounce.
-
In European equities, the pan-Continental Stoxx 600 SXXP declined 0.8% while London’s FTSE 100
UKX,
-0.71%
fell 0.7%. -
In Asia, the Shanghai Composite SHCOMP closed 0.5% higher and Hong Kong’s Hang Seng Index HSI finished 0.6% lower, while Japan’s Nikkei 225 NIKwas off less than 0.1%.
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