Wall Street rebounds from worst day of the year after China stabilizes yuan
06-Aug-19 16:15 ET
Dow +311.78 at 26029.52, Nasdaq +107.23 at 7833.28, S&P +37.03 at 2881.77
briefing.com
[BRIEFING.COM] U.S. stocks rebounded from their worst day of the year on Tuesday, as investors appeared comfortable in buying the dip after China took steps to stabilize its currency. The major indices closed near session highs with the S&P 500 advancing 1.3%.
The Dow Jones Industrial Average increased 1.2%, the Nasdaq Composite increased 1.4%, and the Russell 2000 increased 1.0%.
Tuesday's gains weren't enough to completely undue yesterday's sell-off, but when contrasting the results versus the capitulation-like mood in the futures market last evening, today did seem like a good day. At one point last night, the S&P 500 was indicated for more than a 2% drop at the open after the Treasury Department labeled China a currency manipulator.
China objected to the claim and fixed the yuan at a higher level, signaling intentions to keep the currency stable. This helped subside some of yesterday's currency-related angst and contribute to a more opportunistic mindset throughout the day.
Nine of the 11 S&P 500 sectors finished higher by at least 1.0%. The information technology (+1.6%), financials (+1.5%), and industrials (+1.5%) sectors led the advance, while the energy sector (-0.1%) was the lone holdout as oil prices ($53.84/bbl, -$0.80, -1.5%) continued to decline.
Take-Two Interactive (TTWO 124.56, +9.18, +8.0%), KLA Corporation (KLAC 135.64, +9.18, +7.3%), and Zoetis (ZTS 121.17, +8.60, +7.6%) were some of today's biggest gainers following upbeat results and/or guidance. Chemicals company Mosaic (MOS 22.02, -1.58, -6.7%) fell nearly 7% after providing disappointing results and guidance.
In other corporate news, DuPont (DD 68.53, +2.47, +3.7%) outperformed following a Bloomberg report indicating that the company is considering selling its biosciences unit, which could sell for $20 billion.
While equities rallied, the U.S. Treasury yield curve continued to flatten, which reflected ongoing concerns about the economic outlook. The 2-yr yield increased three basis points to 1.61%, and the 10-yr yield finished flat at 1.74%. The U.S. Dollar Index increased 0.1% to 97.62.
Tuesday's economic data was limited to the JOLTS -- Job Openings report for June, which showed job openings increase to 7.348 million from a revised 7.268 million in May (from 7.323).
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the Consumer Credit report for June on Wednesday.
- Nasdaq Composite +18.1% YTD
- S&P 500 +15.0% YTD
- Dow Jones Industrial Average +11.6% YTD
- Russell 2000 +11.4% YTD
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