Stocks Finish Mixed in a Volatile Session…..

U.S. equities finished mixed, with the Information Technology sector leading stocks on the upside, while defensively-natured issues, such as Health Care, Consumer Staples, Utilities and Real Estate also saw gains. However, cyclically-sensitive sectors, notably Energy, continued to drag on the major indexes amid the persistent uneasiness surrounding the global economic impact of the Delta variant, while growing expectations the Fed could begin to taper asset purchases in Q4 also tempered conviction. Moreover, geopolitical concerns remained in focus following this week’s fall of Afghanistan’s government, and as China continues its regulatory crackdown campaign. News on the economic front was mostly positive, as jobless claims hit a new pandemic low and the Leading Index rose for a fifth-straight month, while growth in Philadelphia manufacturing unexpectedly slowed, but it remained solidly in expansion territory. Earnings were also upbeat, headlined by Dow member Cisco Systems, as well as Macy’s and NVIDIA. Treasuries were mostly higher, modestly applying downside pressure on yields, and the U.S. dollar extended a recent bounce, while crude oil prices tumbled, and gold was lower. Markets in Europe and Asia saw widespread losses amid the global economic uneasiness and as Toyota Motor slashed production due to supply chain issues.

The Dow Jones Industrial Average declined 67 points (0.2%) to 34,894, while the S&P 500 Index rose 6 points (0.1%) to 4,406, and the Nasdaq Composite increased 16 points (0.1%) to 14,542. In moderately-heavy volume, 918 million shares were traded on the NYSE and 4.1 billion shares changed hands on the Nasdaq. WTI crude oil fell $1.71 lower to $63.50 per barrel. Elsewhere, the gold spot price lost $2.40 to $1,782.00 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.5% at 93.56.

Jobless claims continue to moderate, Leading Index positive for fifth-straight month

Weekly initial jobless claims came in at a level of 348,000 for the week ended August 14, versus the Bloomberg consensus estimate calling for 364,000 and compared to the prior week’s upwardly-revised 377,000 level. The four-week moving average fell by 19,000 to 377,750, and continuing claims for the week ended August 7 dropped by 79,000 to 2,820,000, north of estimates of 2,800,000. The four-week moving average of continuing claims declined by 110,500 to 2,998,750.

The Conference Board’s Index of Leading Economic Indicators (LEI) for July rose 0.9% month-over-month (m/m), above estimates calling for a 0.7% gain and June’s downwardly-revised 0.5% increase. The LEI was positive for the fifth-straight month due mostly to positive net contributions from ISM new orders, credit, interest rate spread, stock prices and consumer expectations.

The Philly Fed Manufacturing Business Outlook Index unexpectedly decelerated but remained solidly in expansion territory (a reading above zero) for August. The index declined to 19.4 versus estimates of an increase to 23.1 from July’s 21.9 level. The index missed forecasts as growth in shipments decelerated and inventories moved further into negative territory, though the expansion in new orders accelerated. Inflation pressures remained noticeably elevated, coming in at 71.2, up from the prior month’s 69.7 reading.

Treasuries were mostly higher, as the yield on the 2-year note was flat at 0.22%, while the yields on the 10-year note and the 30-year bond were 2 basis points lower at 1.24% and 1.87%, respectively.

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