Stocks End Mixed as Early Rally Fades 09/19 16:39
Major U.S. stock indexes ended mixed Thursday after an early rally lost its
strength toward the end of the day.
(AP) -- Major U.S. stock indexes ended mixed Thursday after an early rally
lost its strength toward the end of the day.
The S&P 500 managed to hold on to a tiny gain that extended its winning
streak to a third day. The benchmark index, which is within 0.7% of its
all-time high set July 26, ended the day slightly down for the week.
Gains in health care, technology, utilities and other sectors outweighed
losses elsewhere in the market Thursday. Advancers outnumbered decliners on the
New York Stock Exchange. Bond yields were little changed.
The market rallied in the early going as investors weighed a batch of
encouraging economic reports. The positive data reinforces the outlook from the
Federal Reserve, which projects slower economic growth, but not a recession.
On Wednesday, the Fed reduced its benchmark interest rate for the second
time this year in a bid to keep the economy from stalling in the face of
slowing economic growth overseas and uncertainty over the U.S.-China trade war.
Fed officials were sharply divided in their outlook for future interest rate
policy. As a result, the central bank didn't indicate clearly whether more rate
cuts were likely this year. Still, Fed officials left the door open for
additional rate cuts if the economy weakens.
"That's a nuanced message that markets are beginning to feel comfortable
with," said Kate Warne, chief investment strategist at Edward Jones. "And the
fact that the economic data today was a little better than expected is
reassuring, as opposed to worrisome, in an environment where there's a lot of
variation among voting members (of the Fed)."
The S&P 500 index rose 0.06 points, or less than 0.1%, to 3,006.79. The Dow
Jones Industrial Average gave up an early gain, sliding 52.29 points, or 0.2%,
to 27,094.79. The Russell 2000 index of smaller company stocks also
relinquished an early gain, losing 6.87 points, or 0.4%, to 1,561.47.
The Nasdaq squeaked out a gain of 5.49 points, or 0.1%, to 8,182.88.
Bond prices were little changed. The yield on the 10-year Treasury held at
Traders were encouraged Thursday by new economic snapshots, including data
indicating U.S. home sales rose sharply last month and an index of
manufacturing activity that came in ahead of analysts' forecasts. In addition,
applications for U.S. unemployment aid edged higher last week, but still
totaled less than what economists projected.
Recent data suggests the U.S. job market is solid, wages are rising,
consumers are still spending and even such sluggish sectors as manufacturing
and construction have shown signs of rebounding. Still, investors have been
trying to gauge how the economy will fare amid a slowdown in economies overseas
and uncertainty over the trade war between the U.S. and China.
The Fed's outlook for the U.S. economy, and that of corporations, has been
clouded this year as the trade conflict between the world's two biggest
economies has escalated and multiple attempts at negotiating a resolution have
Markets have rallied this month after the U.S. and China took steps to ease
tensions in advance of talks next month. That's fueled speculation among
investors that the two countries may at least reach an interim deal in their
costly trade conflict.
"A lack of escalation or potential de-escalation would be something that
would be viewed positively by the markets," said Bill Northey, senior
investment director at U.S. Bank Wealth Management.
Washington and Beijing were set to begin trade talks Thursday ahead of more
formal negotiations set for next month.
Meanwhile, France's finance minister said Europe is ready to impose
retaliatory tariffs next year on U.S. goods as part of a long-running dispute
over subsidies to plane makers Airbus and Boeing.
Merck & Co. was a big winner among health stocks Thursday, rising 1.1%.
Microsoft climbed 1.8% after the software giant boosted its quarterly dividend
and approved a $40 billion stock buyback. Sempra Energy added 1.1% to lead the
gainers in the utilities sector.
Financial and industrial stocks were among the losers. Regions Financial
slid 1.4% and Southwest Airlines dropped 2%.
Energy stocks, which rallied earlier in the week as crude oil prices soared
following an attack on key oil facilities in Saudi Arabia, also declined. Hess
Several homebuilders rose after the National Association of Realtors said
that sales of previously occupied U.S. homes climbed last month to a seasonally
adjusted annualized rate of 5.49 million units, the best performance since
March 2018. Sales have increased 2.6% from a year ago. Hovnanian Enterprises
U.S. Steel sank 11.2% after it warned investors that its third quarter loss
will be wider than anticipated.
Darden Restaurants fell 5.1% after the owner of the Olive Garden and other
restaurant chains reported first quarter results that disappointed investors.
The company's earnings topped Wall Street's forecasts, but other performance
metrics lagged amid weaker sales at some of Darden's chains.
Benchmark U.S. crude inched up 2 cents to settle at $58.13 a barrel. It's up
6.3% this week. Brent crude, the international standard, rose 80 cents to close
Wholesale gasoline rose 4 cents to $1.70 per gallon. Heating oil climbed 3
cents to $2.00 per gallon. Natural gas fell 10 cents to $2.54 per 1,000 cubic
Gold fell $9.10 to $1,498.40 per ounce, silver fell 3 cents to $17.77 per
ounce and copper fell 1 cent to $2.59 per pound.
The dollar fell to 107.97 Japanese yen from 108.35 yen on Wednesday. The
euro strengthened to $1.1052 from $1.1032.
Major stock indexes in Europe finished mostly lower. Indexes in Asia were