Before The Bell
Stock trading was mixed yesterday, but the major market indexes turned in a strong performance for the month just ended.
Investors appear to be banking on one or more of the 100+ COVID-19 vaccines currently in development becoming available before the end of the year, driving stocks higher in anticipation of an economic rebound. Meanwhile, traders are feeling more confident that the Federal Reserve will be on their side for a good while longer. Last week, the lead bank announced a policy change whereby it will let inflation and employment numbers exceed its usual targets, before stepping in to put on the brakes with interest-rate increases. For all of August, the Dow Jones Industrials and S&P 500 were up about 8%, while the NASDAQ rose 11.2%, each logging their best performance for that month in decades.
For the day, the Dow Jones Industrials were down 223 points, or three quarters of a percentage point. The broader S&P 500, after hitting an intraday high, fell by seven points (0.2%). Meanwhile, the tech-heavy NASDAQ bucked the trend, rising 79 points (0.7%) to close at a new record. Performance was also mixed among the major market sectors. Declining issues held the edge, with energy (down 1.8%), basic materials (-1.4%), and telecommunications (-1.3%) taking the biggest hits. The moves to the upside were more modest, with healthcare up 0.4% and consumer cyclicals advancing 0.3%. Altogether, declining issues outpaced advancers by a better than two-to-one margin.
Meanwhile, European stocks closed down, but showed decent gains for the month of August. Oil prices also edged lower, with light sweet crude falling 0.4%, to about $42.80 a barrel. The commodity was up just under 6% for August, marking its fourth-consecutive monthly gain, but it is still down more than 20% from where it was a year earlier.
As we look to the new day, stocks in Asia had a mixed showing but were mostly up, and the European bourses are trading in similar fashion. On our shores, futures are pointing to a generally positive start for today’s session. Early this morning, we’ll get the latest reading on manufacturing from the Institute for Supply Management, where a slight uptick is expected versus July. We’ll also get the July totals for construction spending, which is also expected to show a small increase compared to the prior month.
– Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
