U.S. equities finished higher amid continued subdued U.S.-China trade tensions, while investors await tomorrow’s European Central Bank monetary policy decision and the Fed’s announcement next week. Treasury yields were up in choppy action following a slightly higher-than-expected, but still-tame, read on U.S. wholesale price inflation, and the U.S. dollar gained ground, while crude oil prices turned sharply lower on news that President Trump was weighing easing sanctions on Iran, and gold finished in the green. On the equity front, RH topped quarterly expectations and upped its guidance, while Dave & Buster’s posted mixed results and Dow member Apple added to yesterday’s gains on the heels of the launch of new product models and its streaming service.
The Dow Jones Industrial Average (DJIA) rose 228 points (0.9%) to 27,137, the S&P 500 Index was 21 points higher (0.7%) at 3,001 and the NASDAQ Composite advanced 86 points (1.1%) to 8,170. In moderate volume, 845 million shares were traded on the NYSE and 2.3 billion shares changed hands on the NASDAQ. WTI crude oil tumbled $1.65 to $55.75 per barrel and wholesale gasoline was down $0.02 at $1.57 per gallon. Elsewhere, the Bloomberg gold spot price rose $10.33 to $1,496.11 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% higher at 98.63.
The Producer Price Index (PPI) showed prices at the wholesale level in August ticked 0.1% higher month-over-month (m/m), above the Bloomberg forecast of a flat reading, and versus July’s unrevised 0.2% rise. The core rate, which excludes food and energy, rose 0.3% m/m, versus expectations calling for a 0.2% increase and compared to July’s unadjusted 0.1% dip. Y/Y, the headline rate was 1.8% higher, versus projections to match July’s 1.7% increase. The core PPI rose 2.3% y/y last month, north of estimates calling for a 2.2% increase, and compared to July’s unrevised 2.1% gain.
The MBA Mortgage Application Index rose 2.0% last week, following the prior week’s 3.1% drop. The increase came as a 0.4% rise in the Refinance Index was met with a 4.5% gain for the Purchase Index. The average 30-year mortgage rate dropped 5 basis points (bps) to 3.82%.
Wholesale inventories were unrevised at a 0.2% gain in July, matching expectations, and above June’s downwardly-revised 0.1% dip. Sales rose 0.3%, following June’s unrevised 0.3% decline.
Treasuries were lower, as the yield on the 2-year note was up 2 bps at 1.68%, while the yields on the 10-year note and the 30-year bond were 4 bps higher at 1.74% and 2.22%, respectively. For a look at the volatility in the fixed income markets,
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