Stocks Recoup Some of Yesterday’s Tumble…..
U.S. equities rebounded from yesterday’s beating in an all-to-familiar theme over the past several months of short-lived downturns. The Information Technology sector led the wide-ranged advance while Financials and Industrials also participated. The recent soft patch has come amid the palpable uncertainty surrounding the persistent increase of Delta coronavirus variant cases, which has exacerbated concerns that we may have reached peak earnings and economic growth rates. Treasuries were mixed following a rally that has ushered in a recent drop in yields, though the U.S. dollar gained ground. Crude oil prices were higher following a tumble as of late and gold saw slight pressure to the downside. Earnings season continued to ramp up, with Dow members IBM and Travelers Companies both topping the Street’s forecast, while global supply chain issues weighed on PPG Industries’ results and guidance. In economic news, housing construction activity in June came in mixed. Europe finished higher to rebound from yesterday’s tumble, while Asia added to the prior session’s downdraft.
The Dow Jones Industrial Average rose 550 points (1.6%) to 34,512, the S&P 500 Index increased 65 points (1.5%) to 4,323, while the Nasdaq Composite advanced 224 points (1.6%) to 14,499. In heavy volume, 1.1 billion shares were traded on the NYSE and 4.5 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.85 to $67.20 per barrel. Elsewhere, the gold spot price decreased $3.01 to $1,809.63 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.1% to 92.97.
Housing construction activity mixed…..
Housing starts for June rose 6.3% month-over-month (m/m) to an annual pace of 1,643,000 units, above the Bloomberg consensus forecast of 1,590,000 units, and compared to May’s downwardly-revised pace of 1,546,000 units. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, dropped 5.1% m/m at an annual rate of 1,598,000, south of expectations calling for 1,696,000 units, and compared to the upwardly-revised 1,683,000 unit pace in May.
Treasuries were mixed after a decisive rally as of late that has weighed heavily on yields. The yield on the 2-year note declined 2 basis points (bps) to 0.20%, while the yield on the 10-year note moved 3 bps higher to 1.22%, and the 30-year bond rate increased 5 bps to 1.87%.
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