U.S. equities finished lower, losing steam late in the day, after a turn of events in today’s key U.K. Brexit votes created caution surrounding a smooth break from the EU. Optimism surrounding U.S.-China trade developments continued, while a slew of earnings from Dow members added to the mix, with results conflicting. Dow member Procter & Gamble gained ground on its quarterly report, though fellow Dow component McDonald’s came under pressure after missing expectations. Outside of earnings, Biogen rallied after announcing plans for a regulatory filing of its treatment for Alzheimer’s and Under Armour’s CEO and founder stepped down from his post. Treasury yields were mostly lower, but the U.S. dollar rose, with existing homes sales falling more than expected and regional manufacturing output surprisingly jumping into expansion territory. Gold and crude oil prices were higher.
The Dow Jones Industrial Average (DJIA) fell 40 points (0.2%) to 26,788, the S&P 500 Index decreased 11 points (0.4%) to 2,996 and the Nasdaq Composite declined 59 points (0.7%) to 8,104. In light volume, 751 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq. WTI crude oil moved $0.97 higher to $54.48 per barrel and wholesale gasoline was unchanged at $1.61 per gallon. Elsewhere, the Bloomberg gold spot price advanced $3.56 to $1,488.06 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies— was up 0.1% at 97.46.
Existing-home sales fell 2.2% month-over-month (m/m) in September to an annual rate of 5.38 million units, compared to the Bloomberg expectation of a decline to 5.45 million units from August’s upwardly-revised 5.50 million rate—which was the highest since March 2018. Sales of single-family homes were down m/m but higher versus year-ago levels, while purchases of condominiums and co-ops rose m/m and y/y. The median existing-home price jumped 5.9% from a year ago to $272,100, marking the 91st straight month of y/y gains. Unsold inventory came in at a 4.1-months pace at the current sales rate, down from 4.4 months a year ago. Sales rose m/m in the Midwest, South and Northeast, but were down in the West. Sales dropped in all four regions compared to the prior month, and were higher in three of the four major regions y/y. National Association of Realtors Chief Economist Lawrence Yun said, “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”
The Richmond Fed Manufacturing Activity Index for October unexpectedly rose back to a level depicting expansion (a reading above zero), jumping to 8 versus forecasts calling for the figure to improve to -7 from September’s -9 level. New orders, shipments and order backlogs all moved into expansion territory.
Treasuries finished mostly higher, as the yield on the 2-year note was flat at 1.60%, while the yields on the 10-year note s and the 30-year bond declined 3 basis points (bps) to 1.77% and 2.25%, respectively.
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