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Stocks rose to fresh record highs Wednesday, and tech stocks powered the Nasdaq higher by more than 1.7%. Investors eyed upbeat developments around Moderna’s (MRNA) Covid-19 vaccine candidate, encouraging signs around US-China trade progress and a strong batch of corporate earnings results. Treasury yields moved higher, and the benchmark 10-year yield tipped back above 70 basis points.
[Click here to read what’s moving markets heading into Thursday, August 27]
On the US-China trade front, China is poised to purchase a record amount of US soybeans in 2020 following a drop in prices of the agricultural product this year during the pandemic, Bloomberg said in a report citing unnamed people familiar with the matter. The news added to other positive developments around the state of trade between the two countries earlier this week with the Office of the US Trade Representative saying Monday that US and Chinese officials “see progress” and are looking to “ensure the success” of the Phase One trade agreement.
US equity markets have continued to climb higher in recent sessions, powered yet again by the mega-cap tech firms that have led the broader market higher for months now. The S&P 500 ended Wednesday’s regular session with a record close, marking the blue-chip index’s fourth straight settlement at a record level. The Nasdaq also ended at a record for a fifth straight day, as shares of big tech firms Facebook (FB), Alphabet (GOOG, GOOGL), Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN), rocketed to their own highest-ever levels.
The Dow underperformed and held near the flat line Wednesday, as shares of Exxon Mobil (XOM), Raytheon Technologies (RTX) and Pfizer (PFE) – the three companies set to depart from the index at the beginning of next week – extended declines. Salesforce (CRM), which is set to replace Exxon Mobil in the Dow, saw its stock surge 26% to a record after the company topped second-quarter earnings expectations and raised its revenue outlook for the year on increased software demand during the pandemic.
Investors also continued to mull the latest set of new economic data, underscoring growing discrepancy in the pace of recovery in different areas of the economy amid the ongoing pandemic. The Conference Board’s Consumer Confidence Index released Tuesday morning unexpectedly fell in August to a six-year low, extending July’s decline after fiscal stimulus to consumers tapered off and a clouded outlook around the pandemic remained. The weakening in consumer confidence bodes negatively for consumer spending, which comprises more than two-thirds of US economic activity.
But concurrently on Tuesday, new government data on the housing market showed new home sales jump to the highest level in 14 years and extended July’s double-digit monthly increase, in the latest data sign of a booming recovery in the US housing market. The home-building company Toll Brothers (TOL) reported July-quarter home purchase orders that surged 26%, hitting the highest-ever fiscal third-quarter level of new orders for the company, according to its earnings statement. And in new data released Wednesday, durable goods orders were shown to have risen for a third straight month in July, with a jump in transportation orders vaulting overall durable goods purchases up more than 11% in the month.
4:03 p.m. ET: S&P 500 powers to a fourth straight record closing high, Salesforce surges 26%
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): +35.14 (+1.02%) to 3,478.76
Dow (^DJI): +83.61 (+0.30%) to 28,332.05
Nasdaq (^IXIC): +198.59 (+1.73%) to 11,665.06
Crude (CL=F): +$0.05 (+0.12%) to $43.40 a barrel
Gold (GC=F): +$37.40 (+1.94%) to $1,960.50 per ounce
10-year Treasury (^TNX): +0.5 bps to yield 0.6870%
12:17 p.m. ET: Moderna shares advance more than 5% after new upbeat data on vaccine candidate
Moderna shares gained more than 5% in intraday trading after the company said its Covid-19 vaccine candidate produced a neutralizing antibodies in older adult patients involved in an early stage clinical trial. The immune response is considered by researchers as a key factor in generating immunity to the coronavirus.
Moderna is set to hold a conference call at 4:30 p.m. ET to discuss results of its trial.
12:11 p.m. ET: Stocks extend gains, Dow turns positive
The Nasdaq jumped more than 1% in afternoon trading Wednesday, with big tech shares surging for yet another session.
The tech-heavy communication services and information technology sectors led advances in the S&P 500, while energy, utilities and real estate lagged. Software companies rose in sympathy with Salesforce, which late Tuesday had delivered record quarterly revenue and raised its guidance for the current quarter and full year.
9:37 a.m. ET: Dick’s Sporting Goods handily topped Q2 estimates; Nordstrom results disappoint
Retailers Dick’s Sports Goods (DKS) and Nordstrom (JWN) reported quarterly results before market open and after market close yesterday, respectively, that underscored the growing rift in performance between big-box retailers that have captured new consumer trends during the pandemic, and those that have struggled to keep pace.
Dick’s Sporting Goods delivered comparable same-store sales growth of 21%, or more than double the 10% increase consensus analysts had expected. The results came as consumers increasingly took part in socially distant outdoor activities and exercise, and turned to Dick’s Sporting Goods for equipment, according to CEO Ed Stack in this morning’s earnings release. E-commerce sales jumped 194% in the quarter. Still, the company’s comparable sales slowed to an 11% jump in the first three weeks of the current quarter, with a slower back-to-school season weighing on results.
Nordstrom, on the other hand, missed consensus expectations on the top and bottom lines, with net sales down 53% over last year. The company was hit by both store closures and the delay of its annual anniversary sale to August from July due to the pandemic. Nordstrom decreased inventory by more than 25% as a move to mitigate markdowns and pad margins – however, the company still posted a wider than expected loss in the quarter, with adjusted losses of $1.54 per share.
9:33 a.m. ET: Stocks open mixed, S&P 500 and Nasdaq advance to fresh intraday record levels
Here were the main moves in markets as of 9:33 a.m. ET:
S&P 500 (^GSPC): +2.45 points (+0.07%) to 3,446.07
Dow (^DJI): -44.2 points (-0.16%) to 28,204.24
Nasdaq (^IXIC): +42.07 points (+0.37%) to 11,509.78
Crude (CL=F): +$0.26 (+0.6%) to $43.61 a barrel
Gold (GC=F): -$0.40 (-0.02%) to $1,922.70 per ounce
10-year Treasury (^TNX): +1.3 bps to yield 0.695%
8:30 a.m. ET: Durable goods orders surge in July for a third straight month
Durable goods orders jumped 11.2% in July, according to the Commerce Department’s preliminary monthly report Wednesday morning, coming in at more than double the 4.8% rise consensus economists expected. Durable goods orders in June rose at a 7.7% clip.
Excluding transportation orders, July durable goods orders were up 2.4%, topping expectations but slowing from June’s 4.0% rise.
“The sharp rise in durable goods orders last month was flattered by a surge in transport orders, but core orders are nevertheless almost back to the pre-pandemic level, suggesting that the recovery in business equipment investment has been V-shaped,” Michael Pearce, senior US economist for Capital Economics, said in a note Wednesday morning.
Non-defense capital goods orders, excluding aircraft, rose 1.9% in July, also slowing from a 4.3% rate in June. Still, this closely watched metric of business investment plans topped expectations for a 1.7% gain in the month.
7:25 a.m. ET Wednesday: Stock futures mixed despite US-China trade hopes
Here were the main moves in equity markets, as of 7:25 a.m. ET:
S&P 500 futures (ES=F): 3,443.00, flat
Dow futures (YM=F): 28,134.00, down 59 points, or 0.21%
Nasdaq futures (NQ=F): 11,768.75, up 42.5 points, or 0.36%
Crude (CL=F): -$0.20 (-0.46%) to $43.15 a barrel
Gold (GC=F): +$1.00 (+0.05%) to $1,924.10 per ounce
10-year Treasury (^TNX): +3.1 bps to yield 0.708%
6:08 p.m. ET Tuesday: Stock futures slightly higher after hitting record closes
Here were the main moves in equity markets, as of 6:08 p.m. ET:
S&P 500 futures (ES=F): 3,444.5, up 1.5 points or 0.04%
Dow futures (YM=F): 28,193.00, flat
Nasdaq futures (NQ=F): 11,735.75, up 10.5 points, or 0.09%