U.S. stocks traded lower in an abbreviated session amid lingering global trade concerns, mixed auto sales figures and an unexpected rise in factory orders. Treasury yields and the U.S. dollar traded lower and crude oil prices also traded to the downside after a mid-morning reversal, while gold gained ground. Overseas, stocks in Asia finished mixed and European shares traded higher. Please note that all U.S. markets will be closed tomorrow in observance of the Independence Day holiday.

The Dow Jones Industrial Average (DJIA) shed 132 points (0.5%) to 24,175, the S&P 500 Index dipped 13 points (0.5%) to 2,713, and the NASDAQ Composite declined 65 points (0.9%) to 7,503. In light volume, 489 million shares were traded on the NYSE and 1.2 billion shares changed hands on the NASDAQ. WTI crude oil declined $0.21 to $73.73 per barrel and wholesale gasoline was down $0.01 at $2.10 per gallon. Elsewhere, the Bloomberg gold spot price traded $11.76 higher to $1,253.79 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% lower at 94.69.

Factory orders grew 0.4% month-over-month (m/m) in May, versus the Bloomberg expectation of a flat reading, and compared to April’s upwardly revised 0.4% decrease. Stripping out the volatile transportation component, orders increased 0.7% and April’s gain was revised higher to 0.9%. May durable goods orders—preliminarily reported last week—were adjusted to a 0.4% decline from an initially-reported 0.6% decrease. Also, nondefense capital goods orders excluding aircraft, a gauge of business spending, were revised to a 0.3% rise from a previously-reported 0.2% dip.

Treasuries ticked higher, with the yield on the 2-year note dipping 2 basis points (bps) to 2.53%, the yields on the 10-year note declining 4 bps to 2.84% and the 30-year bond rate falling 3 bps to 2.96%.

Schwab Center for Financial Research – Market Analysis Group

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