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Stock Market News for Jul 16, 2021

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·5 min read
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U.S. stock markets closed mostly lower on Thursday as shares of heavyweight technology names moved lower. The confidence of market participants took a hit after the U.S. Federal Reserve reported a weaker-than-expected industrial production data for June with production of motor vehicles and parts being affected by the ongoing semiconductor shortage. The Nasdaq Composite and the S&P 500 closed the day in red while the Dow ended the day in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.2%, closing at 34,987.02, continuing its gains from Wednesday. Notably, 16 components of the 30-stock index ended in green while 14 finished the day in red. The tech-heavy Nasdaq Composite closed the day at 14,543.13, down 0.7% or 101.82 points, continuing its losses for the third consecutive session, on the back of weak performance by large-cap technology stocks.

The S&P 500 fell 0.3%, closing the day at 4,360.03, giving up its gains from the previous session. The Energy Select Sector SPDR (XLE) dipped 1.4% while the Utilities Select Sector SPDR (XLU) gained 1.1%. Five out of eleven sectors of the benchmark index closed in the negative zone and six in green.

The fear-gauge CBOE Volatility Index (VIX) was up 4.2% to 17.01. A total of 9.6 billion shares were traded on Thursday, lower than the last 20-session average of 10.4 billion. Decliners outnumbered advancers on the NYSE by a 1.65-to-1 ratio. On Nasdaq, a 1.58-to-1 ratio favored declining issues.

Technology Stocks Moved Lower

Shares of heavyweight technology shares moved lower on Thursday and closed in the red as investors continued to move away from technology names, after favoring them at the start of the week. The Nasdaq Composite closed down while the Technology Select Sector SPDR (XLK) of the S&P 500 dipped 0.8%. Shares of technology behemoths like NVIDIA Corp. NVDA, Amazon.com, Inc. AMZN and Alphabet Inc. GOOGL fell 4.4%, 1.4 and nearly 1%, respectively. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Economic Data

The sentiment of market participants also took a hit as the U.S. Federal Reserve reported that the U.S. industrial production rose 0.4% in June, falling short of the consensus estimate of a rise of 0.6%, and compared to an increase of 0.7% in May which was revised downward from 0.8% reported earlier. The report stated that manufacturing output dipped 0.1% in June compared to a revised increase of 0.9% in May, as the ongoing semiconductor shortage contributed to a decline of 6.6% in the production of motor vehicles and parts. The index for mining, however, rose 1.4% in June, compared to a revised increase of 0.8% in May. The index for utilities rose 2.7% in June, compared to a revised fall of 0.8% in May. The report further stated that for the second quarter as a whole, total industrial production increased at an annual rate of 5.5%.

Capacity utilization was reported at 75.4% in June, falling short of the consensus estimate of 75.6%, but higher than 75.1% reported in May which was revised downward from 75.2% reported earlier.

The U.S. Department of Labor reported that initial jobless claims decreased by 26,000 to 360,000 for the week-ended Jul 10. The report stated that this marked the lowest levels for initial claims since Mar 14, 2020 when it was 256,000. The consensus estimate was 352,000 and the previous week’s data was revised upward by 13,000 to 386,000 from 373,000 reported earlier.

Continuing claims (people who are already receiving benefits) decreased by 126,000 to 3,241,000 for the week-ended Jul 3 from the prior week’s revised level. This also marked the lowest level for continuing claims since Mar 21, 2020 when it was reported at 3,094,000. The previous week’s level was revised upward by 28,000 to 3,367,000 from 3,339,000 reported earlier.

The four-week moving average for continuing claims decreased by 71,750 to 3,376,000. This also marked the lowest level for the average since Mar 21, 2020 when it was reported at 2,071,750. The prior week’s average was revised upward by 7,000 to 3,447,750 from 3,440,750 reported earlier.

The U.S. Bureau of Labor Statistics reported that U.S. import prices rose 1% in June, falling short of the consensus estimate of 1.1% increase, and compared to an increase of 1.4% in May, which was revised upward from 1.1% reported earlier. The price index for imports excluding fuel increased 0.7% in June, following an increase of 0.9% in May.

The report further stated that U.S. export prices increased 1.2% in June, lower than the consensus estimate of 1.41% increase, and compared to an increase of 2.2% in May. The price index for exports excluding agriculture rose 1.1% in June, compared to an increase of 1.8% in May, which was revised upward from 1.7% reported earlier.


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