Stocks traded mostly higher but in a tight range Wednesday morning, eking out small intra-day records at the start of trading, as investors looked ahead to a Thursday speech by Federal Reserve Chairman Jerome Powell in the absence other market-driving catalysts.
How are major benchmarks trading?
The Dow Jones Industrial Average DJIA, -0.15% was down about 52 points, 0.2%, in early trade, at about 28,196, while the S&P 500 SPX, +0.30% pushed past an earlier intraday record to trade near 3,451, up 7 points or 0.2%. The Nasdaq Composite Index COMP, +0.82% was trading near 11,531, up 64 points or 0.6%, also carving out a fresh intraday high.
The Dow on Tuesday lost ground, falling 60.02 points, or 0.2%, to close at 28,248.44, while the S&P 500 advanced 12.34 points, or 0.4%, to end at 3,443.62, a record finish. The Nasdaq Composite rose 86.75 points, or 0.8%, to finish at 11,466.47, also a record.
What’s driving the market?
“With no major headlines or a clear catalyst to drive the markets on Tuesday, and with no major releases scheduled on Wednesday’s agenda, it seems that investors may have taken a more cautious stance ahead of Fed Chair Powell’s keynote speech at the Jackson Hole economic symposium,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note.
Powell will deliver a video address to the annual gathering on Thursday, which is taking place virtually this year. He’s expected to outline changes to the Fed’s policy framework that would allow inflation to run hotter than in the past, ending the Fed practice of hiking interest rates at the first whiff of rising price pressures.
Investors may also be looking for clues to the potential for additional action by the Fed in terms of monetary stimulus, particularly if the White House and congressional Democrats remain deadlocked on a new coronavirus aid package, Pissouros said.
A falling trend in the number of new coronavirus infections in the U.S. and optimism over prospects for a vaccine and other COVID-19 treatments have been credited with pushing stocks to new highs, but analysts said equities might struggle to extend the rise without fresh impetus. Some fear that investors are nearing a “euphoria” stage that could herald a near-term pullback.
Carlos Diez, founder and CEO of MarketGrader, agrees with that sentiment. “There’s a lot of euphoria around the large cap names and that gives me a little bit of pause about what might happen in the near term,” Diez told MarketWatch.
Still, he said, “We have one of the biggest tailwinds in the history which is the massive, massive monetary stimulus globally. It’s hard to argue against risk assets when there’s so much liquidity sloshing around. Over the next six to nine months I don’t expect a major downturn.”
Unlike some market participants, Diez doesn’t think another round of fiscal stimulus is needed — or priced in. “I think investors are probably starting to worry a little bit about the fiscal situation and what happens after all this is over.”
In U.S. economic data, U.S. orders for durable goods rose 11.2% in July helped by a 22% surge in automobile demand. Economists surveyed by MarketWatch were looking for a 4.8% rise after a 7.6% jump in June.
Investors will also hear from Richmond Fed President Tom Barkin at 10 a.m. Eastern and San Francisco Fed President Mary Daly at 3:25 p.m. Eastern.
Which companies are in focus?
- Shares of Salesforce.com Inc. CRM, +26.29% surged nearly 27% at the start of trading. The cloud-based customer-relationship-management company announced quarterly results late Tuesday that topped forecasts as its revenues hit $5 billion for the first time. Shares had jumped Tuesday after S&P Dow Jones Indices announced that Salesforce would join the Dow Jones Industrial Average at the end of the month.
- Autodesk Inc. ADSK, -4.11% shares were 5% lower in early action, despite earnings and revenue that beat estimates.
- Shares of Intuit Inc. INTU, +1.13% rose in early trade after the maker of tax, accounting and small-business software said delayed tax-filing deadlines helped it top forecasts for its fiscal fourth-quarter earnings and revenue.
- Dick’s Sporting Goods Inc. DKS, +15.11% shares rocketed more than 13% after the bell after the retailer reported a 194% e-commerce sales surge in Q2 and said Q3 is off to a good start.
- Apple Inc. AAPL, +0.65% shares rose 0.4% after a price target increase to $600, the highest among Wall Street analysts and a nearly 20% gain from current trading levels.
- Shares of Tesla Inc. TSLA, +4.52% pushed past the $2,100 mark, up more than 3%, after a price target upgrade, to $2,500.
How are other markets trading?
The Stoxx Europe 600 SXXP, +0.61% jumped 0.6%, while U.K.’s FTSE benchmark UKX, +0.51% was down 0.4%.
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.707% TMUBMUSD10Y, 0.707% rose 1.9 basis point to 0.806% as traders readied for a round of new issuance. Bond prices move inversely to yields.
Gold futures GCZ20, +1.35% rose 0.1% to $1,924.30 an ounce, helped by a firming dollar. Oil futures CL.1, +0.53% were up 0.9% to $43.72 a barrel as Hurricane Laura moved through the Gulf of Mexico ahead of expected landfall on Thursday.
The ICE U.S. Dollar Index DXY, -0.06%, which tracks the currency versus a basket of six major rivals, was fractionally higher, near 93.06.
Read: Is the stock market more important to the economy than the $600 unemployment benefit?
Add Comment