Mixed Day of Stock Trade Ends Higher 07/08 15:58
Wall Street's rally got back on track Wednesday after more gains for big
technology stocks helped pull the S&P 500 to its sixth gain in seven days.
NEW YORK (AP) -- Wall Street's rally got back on track Wednesday after more
gains for big technology stocks helped pull the S&P 500 to its sixth gain in
It came after a jumbled day of trading, where the S&P 500 drifted up and
down a few times before a last-hour lift sent it to a gain of 0.8%. Treasury
yields and oil prices also ticked higher, but caution continued to hang over
markets as gold touched its highest price since 2011.
The Dow Jones Industrial Average rose 177.10 points, or 0.7%, to 26,067.28,
and the Nasdaq composite gained 148.61, or 1.4%, to 10,492.50 to set another
record. The S&P 500, which more index funds benchmark themselves against, rose
24.62 to 3,169.94 and is back within 6.4% of its record.
Wednesday's up-and-down trading was reminiscent of the market's moves over
the last month, when Wall Street has largely churned in place. Optimism is
rising about a reopening economy, but worsening coronavirus infection levels
across much of the U.S. South and West threaten to derail the budding economic
Several very early indicators on the economy may also be flashing yellow,
such as dine-in reservations at restaurants and airport traffic, as some states
roll back their reopenings, said Katie Nixon, chief investment officer at
Northern Trust Wealth Management.
That could be driving investors back into the comfort of the stocks that
have served them so well for years: big tech-oriented stocks. Such stocks have
continued to climb as investors bet they'll be able to grow almost regardless
of what the economy is doing.
Amazon added 2.7%, Apple rose 2.3% and Microsoft gained 2.2%. Because of
their immense size, those three stocks alone were responsible for more than
half the S&P 500's gain for the day.
"It's sort of like: Buy what feels safe, even though you know you're maybe
overpaying for it," Nixon said. "But it's better than betting on a recovery
that's maybe going to be slower than expected, particularly given the fact that
we're seeing a spike in cases in some major areas of the United States."
Such indomitable strength for technology stocks is raising some concerns,
"The Nasdaq is screaming warning signs that there's rampant speculation,"
said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment
Management, after expectations have built so high.
"I would be very cautious on some of these companies," he said. "The worst
thing in the world is to own companies that have just gone hyperbolic."
Roughly two in five stocks in the S&P 500 fell Wednesday, with several
chemical and construction-related companies taking the hardest hits.
The mixed trading follows Tuesday's snapback, when the S&P 500 fell 1.1% to
break a five-day winning streak. The selling accelerated late in the day, and
analysts say investors were likely cashing in on recent gains given the
uncertainty that lies ahead for markets.
"Up until this time, there's been a pretty consistent litany of pretty good
economic reports, but all of a sudden the reopening seems to have plateaued,"
said David Joy, chief market strategist at Ameriprise Financial.
"There's a certain fragility in the consumer confidence data that's out
there right now," he said. "Same thing is true in the jobs data. I think the
weekly jobless claims number is going to be increasingly important."
Few headline economic reports are left on the schedule for this week other
than Thursday's update on weekly jobless claims. Next week may have more
action, when a couple dozen companies in the S&P 500 are scheduled to report
their earnings results for the second quarter.
Expectations for the upcoming earnings season are dismal. More important for
investors, analysts say, may be what companies say about how they plan to
navigate the rest of the year and even 2021, when profits are expected to grow
Treasury yields ticked higher. The yield on the 10-year Treasury rose to
0.65% from 0.64%. It tends to move with investors' expectations for the economy
In Asian stock markets, Japan's Nikkei 225 slipped 0.8%, Hong Kong's Hang
Seng added 0.6% and South Korea's Kospi slipped 0.2%. The biggest action was in
Shanghai, where stocks jumped another 1.7%. That brings their gain to 14% for
July so far, raising concern that speculators are driving the market.
In Europe, the German DAX lost 1%, and France's CAC 40 dropped 1.2%. The
FTSE 100 in London slipped 0.5%.
Benchmark U.S. crude rose 28 cents to settle at $40.90 per barrel. Brent
crude, the international standard, added 21 cents to $43.29 a barrel.
Gold for delivery in July rose $11.30 to settle at $1,815.50 per ounce. The
more actively traded contract for August delivery neared $1,830 during the day,
the highest level since September 2011.
Gold's price tends to rise with worries about the economy and inflation, and
it has climbed more than $300 since mid-March. Its rise, alongside the stock
market's rally, highlights for critics the disconnect between Wall Street and