U.S. Stocks Finish Choppy Trading Day At New Record Closing Highs
Stocks showed a lack of direction throughout much of the trading day on Monday but managed to end the session modestly higher. With the uptick on the day, the major averages once again reached new record closing highs.
The major averages all finished the day in positive territory, although the Nasdaq inched up just 3.72 points or less than a tenth of a percent to 14,840.71. The Dow rose 82.76 points or 0.2 percent to 35,144.31 and the S&P 500 edged up 10.53 points or 0.2 percent to 4,422.30.
The choppy trading seen for most of the day came as traders took a breather following the substantial rebound seen over the course of the previous week.
The rally represented a remarkable turnaround for the markets following the sell-off last Monday, which dragged the major averages down to their lowest closing levels in almost a month.
Upbeat earnings news contributed to rebound along with continued optimism about the economy despite some concerns about the spread of new coronavirus variants.
Traders may also have been reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed is expected to leave interest rates unchanged, but traders will be paying close attention to any comments regarding the central bank’s asset purchase program.
Traders are also likely to keep an eye on some key U.S. economic data, including reports on durable goods orders, consumer confidence, second quarter GDP and personal income and spending.
The Commerce Department released a report this morning unexpectedly showing another steep drop in new home sales in the month of June.
The report said new home sales tumbled by 6.6 percent to an annual rate of 676,000 in June after plunging by 7.8 percent to a revised rate of 724,000 in May.
The continued nosedive surprised economists, who had expected new home sales to jump by 4.0 percent to an annual rate of 800,000 from the 769,000 originally reported for the previous month.
With the unexpected decrease, new home sales slumped to their lowest annual rate since hitting 582,000 in April of last year.
Earnings news may also attract attention this week, with Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), Boeing (BA), McDonald’s (MCD), Pfizer (PFE), Amazon (AMZN), and Exxon Mobil (XOM) among a slew of companies due to report their quarterly results.
Airline stocks moved sharply higher over the course of the session, resulting in a 3.4 percent spike by the NYSE Arca Airline Index.
Significant strength was also visible among steel stocks, as reflected by the 3.3 percent jump by the NYSE Arca Steel Index. The index ended the session at its best closing level in over a month.
Energy stocks also saw considerable strength on the day even though the price of crude oil for September delivery edged down $0.16 to $71.91 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 3.2 percent, the NYSE Arca Oil Index surged up by 2.4 percent and the NYSE Arca Natural Gas Index advanced by 2.2 percent.
Gold stocks also turned in a strong performance despite a decrease by the price of the precious metal, while biotechnology stocks showed a notable move to the downside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, although Japan’s Nikkei 225 Index bucked the downtrend and jumped by 1 percent. China’s Shanghai Composite Index tumbled by 2.3 percent, while Hong Kong’s Hang Seng Index plunged by 4.1 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index rose by 0.2 percent, the U.K.’s FTSE 100 Index closed just below the unchanged line and the German DAX Index fell by 0.3 percent.
In the bond markets, treasuries closed modestly higher after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 1.276 percent.
Reaction to the latest earnings news may drive trading on Tuesday, with Tesla (TSLA), Logitech (LOGI) and F5 Networks (FFIV) among the companies releasing their quarterly results after the close of today’s trading.
3M (MMM), Corning (GLW), General Electric (GE), JetBlue (JBLU), UPS (UPS) and Xerox (XRX) are also among the companies due to report their results before the start of trading on Tuesday.
Trading on Tuesday may also be impacted by reaction to reports on durable goods orders and consumer confidence, although activity is likely to remain light ahead of the Fed announcement.
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