Stocks Able To Post Gains in Rocky Session…..
U.S. equities finished higher in a volatile session, rebounding somewhat from yesterday’s losses that came amid worries over the rise in new COVID-19 cases that has presented a challenge to signs of progress in global economic recoveries. M&A was in focus, as Allstate Corporation agreed to acquire National General Holdings Corporation for about $4.0 billion in cash. Levi Strauss saw heavy pressure after posting a severe drop in revenues for Q2, and Biogen got a boost on news that it submitted an application to the FDA for its treatment for Alzheimer’s disease. Treasury yields were little changed and the U.S. dollar was lower, while gold and crude oil prices were higher. In light economic news, mortgage applications increased and consumer credit fell, but at a slower pace. Europe finished lower, and markets in Asia were mixed.
The Dow Jones Industrial Average rose 177 points (0.7%) to 26,067, the S&P 500 Index increased 25 points (0.8%) to 3,170 and the Nasdaq Composite advanced 149 points (1.4%) to 10,493. In moderately-heavy volume, 1.0 billion shares were traded on the NYSE and 3.9 billion shares changed hands on the NASDAQ. WTI crude was up $0.28 at $40.90 per barrel and wholesale gasoline added $0.02 to $1.29 per gallon. Elsewhere, the Bloomberg gold spot price gained $14.55 to $1,809.41 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.4% at 96.49.
Mortgage applications rise, consumer credit declines in a relatively quiet economic day…..
The MBA Mortgage Application Index rose 2.2% last week, following the prior week’s 1.8% drop. The increase came as the Refinance Index ticked 0.4% higher, accompanied by a 5.3% gain for the Purchase Index. The average 30-year mortgage rate declined 3 basis points (bps) to 3.26%.
Consumer credit, released in the final hour of trading, showed consumer borrowing fell by $18.3 billion during May, more than the $15.0 billion decline that was forecast by economists polled by Bloomberg, while April’s figure was adjusted to a drop of $70.2 billion from the originally reported $68.8 billion decrease. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose by $6.0 billion, a 2.3% increase year-over-year (y/y), while revolving debt, which includes credit cards, shed $24.3 billion, a 28.6% y/y plunge.
Treasuries were little changed, as the yield on the 2-year note inched 1 bp higher to 0.17%, while the yields on the 10-year note and the 30-year bond were flat at 0.66% and 1.39%, respectively.
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