U.S. equities finished in negative territory, but well off their lows in a bumpy session, as investors weighed an improvement in trade optimism, ramped-up political noise in Washington and global growth uncertainties. In economic news, Q2 GDP growth was unrevised, as expected, at a 2.0% pace, jobless claims ticked higher and pending home sales rose more than expected. Treasury yields were lower and the U.S. dollar ticked higher, while gold gained modest ground and crude oil prices were little changed. News on the equity front surrounded mixed quarterly results and guidance from KB Home, Conagra and Accenture, while Beyond Meat rallied after McDonald’s announced a test of a new plant-based menu item using the company’s patties.
The Dow Jones Industrial Average (DJIA) fell 80 points (0.3%) to 26,891, the S&P 500 Index decreased 7 points (0.2%) to 2,978 and the Nasdaq Composite declined 47 points (0.6%) to 8,031. In moderate volume, 754 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq. WTI crude oil fell $0.08 to $56.41 per barrel and wholesale gasoline added $0.02 to $1.62 per gallon. Elsewhere, the Bloomberg gold spot price inched $0.24 higher to $1,504.29 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% to 99.21.
The final look (of three) at Q2 Gross Domestic Product the broadest measure of economic output, showed a quarter-over-quarter (q/q) annualized rate of growth of 2.0%, unrevised from the first revision to match the Bloomberg forecast. Q1 GDP grew by an unrevised 3.1% rate. Personal consumption was revised to a 4.6% increase, from the second estimate of a 4.7% gain, where it was expected to remain, and compared to the unrevised 1.1% rise seen in Q1.
On inflation, the GDP Price Index was unrevised at a 2.4% increase, in line with estimates, while the core PCE Index, which excludes food and energy, was revised to a 1.9% rise, from a 1.7% increase, compared to forecasts to be unadjusted.
Weekly initial jobless claims rose by 3,000 to 213,000, versus estimates of 212,000, with the prior week’s figure being revised higher by 2,000 to 210,000. The four-week moving average dipped by 750 to 212,000, while continuing claims fell by 15,000 to 1,650,000, south of estimates of 1,666,000.
The advance goods trade balance showed that the August deficit widened by a smaller-than-expected amount, coming in at $72.8 billion versus estimates of $73.4 billion. July’s deficit was revised higher to $72.5 billion.
Preliminary wholesale inventories rose 0.4% month-over-month (m/m) for August, compared to expectations to match July’s downwardly-revised 0.1% increase.
Pending home sales rose 1.6% m/m in August, versus projections of a 1.0% gain, and following the unrevised 2.5% drop registered in July. Sales were 1.1% higher y/y, compared to the expected 1.3% rise. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.
The September Kansas City Fed Manufacturing Activity Index improved more than expected but remained at a level depicting contraction (a reading below zero), rising to -2 from August’s unrevised level -6 reading, and versus forecasts of an increase to -4.
Treasuries were higher, as the yields on the 2-year and 10-year notes declined 3 basis points (bps) to 1.66% and 1.70%, respectively, while the 30-year bond rate decreased 4 bps to 2.14%.
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