U.S stock indexes fell yesterday as a rally in growth stocks ran out of steam, while economically sensitive cyclical gained as a fall in weekly jobless claims last week strengthened views about a recovery in the labor market. Mega-cap technology stocks including Apple Inc., Microsoft Corp, Amazon.com, Alphabet Inc., and Facebook Inc. fell between 0.7% and 1.7%. The S&P 500 technology sector index fell 0.9% and was on track to snap a four-day winning streak. Seven of the 11 major S&P sectors were trading lower, including consumer discretionary and communication services. Value-oriented sectors such as financials, industrials, and materials led gains yesterday, as the Labor Department said initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 360,000 for the week ended July 10, a 16-month low. However, investors have been fretting over a sooner-than-expected hawkish shift by the Federal Reserve amid signs of a steady economic rebound.
Dow Jones Industrial Average
The Dow Jones Industrial Average rose 0.15%. The biggest gainers of the session on the Dow Jones Industrial Average were Honeywell International Inc., which rose 2.20% or 5.02 points to trade at 232.79 at the close. UnitedHealth Group Incorporated added 1.27% or 5.25 points to end at 420.00 and Home Depot Inc. was up 1.05% or 3.36 points to 322.58 in late trade. The biggest losers included Salesforce.com Inc., which lost 2.01% or 4.88 points to trade at 237.55 in late trade. Walgreens Boots Alliance Inc. declined 1.34% or 0.63 points to end at 46.25 and Intel Corporation shed 1.24% or 0.70 points to 55.82.
NASDAQ 100 The NASDAQ index lost 0.70%. The top performers on the NASDAQ Composite were Liquid Media Group Ltd which rose 67.09% to 2.6400, Cinedigm Corp which was up 37.04% to settle at 1.4800 and ATA Inc. which gained 28.02% to close at 3.815. The worst performers were Imv Inc. which was down 30.29% to 1.450 in late trade, 1895 of Wisconsin Inc. Bancorp which lost 28.82% to settle at 11.19, and Marin Software Inc. which was down 27.36% to 9.93 at the close.
Oil
Oil prices fell by more than $1 a barrel yesterday on expectations of more crude hitting the market after a compromise deal between leading OPEC producers and a surprisingly poor weekly reading on U.S fuel demand. U.S. West Texas Intermediate (WTI) crude settled at $71.65 a barrel, down $1.48, or 2.2%. The slide continued Wednesday's losses after Reuters reported that Saudi Arabia and the United Arab Emirates had reached an accord that should pave the way for a deal to supply more crude to a tight oil market. A deal has yet to be solidified, and the UAE energy ministry said deliberations are continuing. Talks among the Organization of the Petroleum Exporting Countries, Russia, and their allies, a group is known as OPEC+, broke down this month after the UAE objected to extending the group's supply pact beyond April 2022, saying the deal did not account for the UAE's increased output capacity. Several banks, including Goldman Sachs, Citi, and UBS expect supplies to remain tight in the coming months.
Precious and Base Metals
Gold prices today were headed for the fourth straight weekly gain, as investors took comfort from Federal Reserve Chair Jerome Powell’s stance that the U.S central bank would continue to support the economy and inflation will be transitory. Spot gold was flat at $1,829.14 per ounce but gained 1.2% so far this week. U.S gold futures edged up 0.1% to $1,830.30. Powell faced sharp questions about inflation and banking regulation in a hearing before the Senate Banking Committee on Thursday and repeated his pledge of “powerful support” to complete the U.S. economic recovery. Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement. The Federal Reserve will shutter its asset purchases program by end-2022, according to a Reuters poll, with a few more economists now predicting a rate hike as early as next year, but they pegged new COVID-19 variants as the biggest economic risk. The economy in China, a leading consumer of gold, grew slightly more slowly than expected in the second quarter, weighed down by higher raw material costs and new COVID-19 outbreaks, fanning expectations that policymakers may have to do more to support the recovery. Silver was flat at $26.32 per ounce, palladium rose 0.1% to $2,731.96, and platinum dipped 0.1% to $1,136.94. Copper prices rose yesterday as lower than expected growth from top consumer China stoked hopes for more support for the world’s second-largest economy. China’s growth in the second quarter undershot expectations in a Reuters poll owing to slowing manufacturing activity, higher raw material costs and new COVID-19 outbreaks. Meanwhile, U.S Fed chairman Jerome Powell told Congress he saw no need to rush the shift towards tighter post-pandemic monetary policy, which bodes well for liquidity and metals demand.
Traditional Agricultures
Corn futures retreated from a near two-week high hit in the previous session, although losses were limited by worries about crops in key U.S growing regions. Wheat dipped yesterday after a rally, while soybean ticked higher. Corn and soybeans are being underpinned by sustained dry weather.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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