Markets

Midday Update: Stocks Reach New Records on Strong Consumer Confidence, Housing Data

Fueled by better-than-expected consumer confidence, strong manufacturing data and rising home prices, stocks continued to build on Monday's strength, carrying both the Dow Jones Industrial Average and S&P 500 to new record highs. Another strong performance in the biotech sector was helping the Nasdaq Composite reach a new 14-year high. Energy shares are getting a boost from a modest gain in oil prices , while financial stocks were higher amid expectations for central bank monetary policy remaining accommodative.

Today's economic data was largely market-friendly with both the FHFA and Case Shiller home price indices beating expectations. The Case-Shiller index shot up 1.0% (seasonally-adjusted) versus estimates for a very modest 0.1% gain. The Federal Housing Finance Authority index rose 0.4% in June, beating the street consensus for a 0.3% gain.

According to the Conference Board, consumer confidence improved dramatically in August as their index jumped to a near 7 year high of 92.4 from 90.9 in July. The market was expecting a small decline to 89.5.

Meanwhile, manufacturing in the Richmond Federal Reserve region showed significant expansion as the index measuring business activity shot up to a 3.5 year high of 12.0 from July's 7.0, well above forecasts for a gain to only 8.0.

But the headline number was the record surge in durable goods orders of 22.6% in July, more than 4 times what the street expected. Unfortunately, the entire gain was attributed to a 318% increase in non-defense aircraft orders. Excluding the transportation sector, July durable goods actually fell 0.8%, although this followed an upwardly revised gain of 3.0% the month prior, initially reported as only +0.8%.

In Europe, equities continue to get a boost from expectations that the European Central Bank will announce further stimulus measures at next month's monetary policy meeting. Dovish comments from ECB President Mario Draghi last Friday coupled with estimates for only a small gain in EU CPI later this week has been generating demand for both EU equities and government bonds amid expectations for additional liquidity to stimulate the EU-zone economy.

Crude oil was up $0.12 to $93.47 per barrel. Natural gas was unchanged at $3.98 per 1 million BTU. Gold was up $5.30 to $1,284.20 an ounce, while silver was up $0.08 to $19.51 an ounce. Copper was down $0.03 to $3.21 per pound.

Among energy ETFs, the United States Oil Fund was up 0.12% to $34.91 with the United States Natural Gas Fund was down 0.18% to $21.69. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 1.19% to 25.99 while SPDR Gold Shares were up 0.59% to $123.46. The iShares Silver Trust was up 0.42% to $18.68.

Here's where the U.S. markets stand at mid-day:

NYSE Composite Index up 36.71 (+0.33%) to 11,042.07

Dow Jones Industrial Average up 59.41 (+0.35%) to 17,136.28

S&P 500 up 4.85 (+0.24%) to 2,002.77

Nasdaq Composite Index up 12.98 (+0.28%) to 4,570.33

GLOBAL SENTIMENT

Nikkei 225 Index down 0.59%

Hang Seng Index down 0.37%

Shanghai China Composite Index down 0.99%

FTSE 100 Index up 0.70%

CAC 40 up 1.18%

DAX up 0.82%

NYSE SECTOR INDICES

NYSE Energy Sector Index up 0.40%

NYSE Financial Sector Index up 0.33%

NYSE Healthcare Sector Index up 0.61%

UPSIDE MOVERS

(+) KITE (+19.28%) Reports positive results from clinical trial evaluating KTE-C19 as treatment for aggressive non-Hodgkin's.

(+) DSW (+9.45%) Reported higher-than-Q2 expected profit and sales.

(+) GENE (+39.53%) Court denies GlaxoSmithKline's motion to dismiss patent suit.

(+) DAKT (+6.76%) Fiscal Q1 results top street expectations, CEO gives an optimistic outlook.

DOWNSIDE MOVERS

(-) DRL(-17.70%) Fails to settle dispute with Puerto Rico Treasury Department.

(-) BBY (-5.50%) Misses revenue estimates, issues downbeat outlook.

(-) ADEP (-19.95%) Missed Q4 earnings estimates.

(-) ASTI (-19.43%) Shares down ahead of 1 for 10 stock split.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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