Equities Mixed as an August of Strong Gains Comes to a Close…..
U.S. stocks closed the day mixed to wrap up the month of August, which has seen the equity markets rally to push the S&P 500 and Nasdaq back to all-time highs, while the Dow has erased most losses for 2020. Technology issues led the way, while the Dow was held back by the first day of trading with three new constituents. Last week’s shift in policy by the Fed remained at the forefront of investors’ minds. The start of a busy economic week kicked off, as China reported upbeat services sector activity though its manufacturing output came in slightly below forecasts, and Dallas manufacturing activity returned to expansion territory. In M&A news, Aimmune Therapeutics surged after agreeing to be acquired by Nestle. Treasury yields were mixed, and the U.S. dollar remained hampered. Gold traded higher and crude oil prices traded lower. Asia finished mixed, with Japan advancing solidly on a $6.0 billion investment in the nation’s largest trading companies by Warren Buffett. Europe finished lower, while U.K. markets were closed for a holiday.
The Dow Jones Industrial Average fell 224 points (0.8%) to 28,430 and the S&P 500 Index lost 8 points (0.2%) to 3,500, while the Nasdaq Composite advanced 80 points (0.7%) to 11,775. In heavy volume, 1.1 billion shares were traded on the NYSE and 3.5 billion shares changed hands on the NASDAQ. WTI crude oil shed $0.36 to $42.61 per barrel and wholesale gasoline lost $0.04 to $1.21 per gallon. Elsewhere, the Bloomberg gold spot price was up $4.15 to $1,968.98 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.2% at 92.19.
Regional manufacturing activity returns to growth, beginning a busy economic week…..
The August Dallas Fed Manufacturing Index improved more than expected and moved into a level depicting expansion (a reading above zero). The index rose to 8.0 from -3.0 in July, and better than the Bloomberg forecast of zero. The stronger-than-expected report came as growth in new orders, shipment volumes, wages and employment all accelerated, while production declined but remained solidly in expansion territory.
Treasuries were mixed, as the yield on the 2-year note moved 1 basis point (bp) higher to 0.13%, while the yield on the 10-year note ticked 1 bp lower to 0.71% and the 30-year bond rate declined 2 bps to 1.48%.
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