August 6, 2020

Another Day of Slight Movement on Wall Street as Investors Weigh Data

Gains in energy and chemical companies helped nudge the stock market higher on Thursday.

The modest move extends a pattern this week: even with plenty of earnings news from big companies, the broader market has shuffled between minor gains and minor losses.

Cabot Oil and Gas and Range Resources reported revenue and earnings that trumped estimates, sending their stocks up 7 percent. Cabot rose $4.85 to $76.56. Range Resources rose $5.34 to $81.39.

Facebook soared 30 percent after reporting earnings late on Wednesday that easily beat analysts’ forecasts, thanks to higher revenue from advertisements on mobile devices. Facebook’s stock gained $7.85 to $34.36.

Nearly halfway through the second-quarter earnings season, the overall trend looks good, but not great, said Tyler Vernon, chief investment officer of Biltmore Capital in Princeton, N.J. “There have been some big disappointments, like Caterpillar yesterday, but we’re seeing better and better numbers coming out.”

The Standard Poor’s 500-stock index gained 4.31 points, or 0.3 percent, to close at 1,690.25.

The Dow Jones industrial average rose 13.37 points, or 0.1 percent, to 15,555.61. The Dow was held back by Home Depot and Caterpillar, which warned on Wednesday that its sales could sag.

The Nasdaq composite index gained 25.59 points, or 0.7 percent, to 3,605.19.

Analysts forecast that companies in the S. P. 500 index would report earnings growth of 4.3 percent over the same period last year, according to SP Capital IQ. At the beginning of July, the forecast was for growth of 2.8 percent. More than six out of every 10 companies have cleared analysts’ earnings targets so far.

Improving profits should help push the S. P. 500 index above 1,700 in the coming weeks, Mr. Vernon said.

D. R. Horton Inc., the country’s largest builder, and PulteGroup said orders for new houses jumped in the second quarter, but their results still fell short of what analysts had expected. PulteGroup also posted a 14 percent decline in profits.

D. R. Horton dropped $1.82, or 9 percent, to $19.38. PulteGroup lost $1.90, or 10 percent, to $16.55, the biggest drop of any stock in the S. P. 500.

“I think what you’re seeing a bit of today is people questioning what higher mortgage rates mean for housing,” said Joe Kinahan, chief strategist at TD Ameritrade in Chicago.

In the market for United States government bonds, benchmark 10-year Treasury note rose 2/32, to 92 28/32. Its yield was unchanged from late Wednesday at 2.58 percent. Late last week, it was trading at 2.48 percent.

The 10-year yield acts as a benchmark rate for most mortgage loans. A sharp increase in the rate drives up mortgage costs and could slow down sales in the housing market.

It is still very low by historical standards, thanks in large part to the Federal Reserve’s bond-buying program. The 10-year Treasury yield hit a recent low of 1.63 percent on May 3. By contrast, it was trading around 4 percent in the summer of 2008, shortly before the worst days of the financial crisis.

The Russell 2000 index of small-company stocks set another record high, gaining 10.35 points, or 1 percent, to 1,054.18. The Russell has done better than other major indexes this year, gaining 24 percent versus 19 percent for the S. P. 500 and the Dow.

Article source:

Speak Your Mind