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U.S. stock markets closed mostly higher on Wednesday after the U.S. Federal Reserve Chair assured that the Fed will maintain its easy monetary policy. The confidence of market participants was also boosted as President Joe Biden was optimistic after a budget agreement of $3.5 trillion spending was reached by Senate Democrats late Tuesday. The Dow and the S&P 500 closed the day in green while the Nasdaq Composite ended the day in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1%, closing at 34,933.23, snapping its losses from Tuesday. Notably, 15 components of the 30-stock index ended in green while 15 finished the day in red. One of the major gainers of the Dow was The Coca-Cola Co. (KO - Free Report) that gained 2.3%. Coca-Cola carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite closed the day at 14,644.95, down 0.2%, continuing its losses for the second consecutive session, on the back of weak performance by large-cap technology stocks. The S&P 500 gained 0.1%, closing the day at 4,374.30, terminating its losses from the previous session. The Real Estate Select Sector SPDR (XLRE) and the Utilities Select Sector SPDR (XLU) gained 0.9% and 0.9%, respectively, while the Energy Select Sector SPDR (XLE) lost nearly 3%. Seven out of eleven sectors of the benchmark index closed in the negative zone and four in green.
The fear-gauge CBOE Volatility Index (VIX) was down 4.6% to 16.33. A total of 9.8 billion shares were traded on Wednesday, lower than the last 20-session average of 10.5 billion. Decliners outnumbered advancers on the NYSE by a 1.32-to-1 ratio. On Nasdaq, a 2.12-to-1 ratio favored declining issues.
Fed Chair Assured of Maintaining Easy Monetary Policy
Wall Street closed mostly higher in Wednesday’s session after the U.S. Federal Reserve Chair Jerome Powell, in his testimony before the Congress, stated that the Fed will maintain its easy monetary policy as the U.S. economy still had to improve a lot more. Powell further stated that the labor market still remained well below the pre-pandemic levels.
On inflation, the Fed Chair stated that it has surged notably and is likely to remain elevated in the coming months before it moderates. Powell reiterated that the current rise in inflation is transitory and will be offset as soon as conditions normalize.
President Biden Optimistic After Senate Democrats Reached Budget Deal
President Joe Biden sounded optimistic on Wednesday and told reporters after arriving on Capitol Hill that “we’re going to get this done,” as Senate Democrats reached a budget agreement on late Tuesday for spending $3.5 trillion on “human infrastructure” that will include spending on issues like climate change, healthcare and other programs.
Economic Data
The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for final demand rose 1% in June, surpassing the consensus estimate of a rise of 0.6%, and also higher than the May reading of 0.8%.
The core PPI, which excludes food and energy, also rose 1% in June, surpassing the consensus estimate of a rise of 0.4%, but compared to a rise of 1.1% in May.
The Energy Information Administration reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ending Jul 9, decreased by 7.9 million barrels per day from the previous week. The report stated that crude oil inventories are below the five-year average by about 8%.
The U.S. Federal Reserve published its Beige Book on Wednesday wherein it was stated that from late May to early July, the U.S. economy strengthened further and witnessed a moderate to robust growth. Sectors like travel and tourism, transportation, non-financial services and manufacturing reported above-average growth.
The report further stated that three quarters of districts reported slight or modest job gains while the remainder of districts reported moderate or strong growth in employment. Prices also increased at a pace that was above-average with seven districts reporting strong growth in price while the remainder witnessed moderate gains.
Reflective of improving conditions in the United States, as economic activities gather pace, Ryder System, Inc. (R - Free Report) — one of leading players in the Equipment and Leasing space — announced 3.6% hike in its quarterly dividend payout to $0.58 per share (annualized $2.32). (Read More)
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Stock Market News for Jul 15, 2021
U.S. stock markets closed mostly higher on Wednesday after the U.S. Federal Reserve Chair assured that the Fed will maintain its easy monetary policy. The confidence of market participants was also boosted as President Joe Biden was optimistic after a budget agreement of $3.5 trillion spending was reached by Senate Democrats late Tuesday. The Dow and the S&P 500 closed the day in green while the Nasdaq Composite ended the day in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1%, closing at 34,933.23, snapping its losses from Tuesday. Notably, 15 components of the 30-stock index ended in green while 15 finished the day in red. One of the major gainers of the Dow was The Coca-Cola Co. (KO - Free Report) that gained 2.3%. Coca-Cola carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite closed the day at 14,644.95, down 0.2%, continuing its losses for the second consecutive session, on the back of weak performance by large-cap technology stocks. The S&P 500 gained 0.1%, closing the day at 4,374.30, terminating its losses from the previous session. The Real Estate Select Sector SPDR (XLRE) and the Utilities Select Sector SPDR (XLU) gained 0.9% and 0.9%, respectively, while the Energy Select Sector SPDR (XLE) lost nearly 3%. Seven out of eleven sectors of the benchmark index closed in the negative zone and four in green.
The fear-gauge CBOE Volatility Index (VIX) was down 4.6% to 16.33. A total of 9.8 billion shares were traded on Wednesday, lower than the last 20-session average of 10.5 billion. Decliners outnumbered advancers on the NYSE by a 1.32-to-1 ratio. On Nasdaq, a 2.12-to-1 ratio favored declining issues.
Fed Chair Assured of Maintaining Easy Monetary Policy
Wall Street closed mostly higher in Wednesday’s session after the U.S. Federal Reserve Chair Jerome Powell, in his testimony before the Congress, stated that the Fed will maintain its easy monetary policy as the U.S. economy still had to improve a lot more. Powell further stated that the labor market still remained well below the pre-pandemic levels.
On inflation, the Fed Chair stated that it has surged notably and is likely to remain elevated in the coming months before it moderates. Powell reiterated that the current rise in inflation is transitory and will be offset as soon as conditions normalize.
President Biden Optimistic After Senate Democrats Reached Budget Deal
President Joe Biden sounded optimistic on Wednesday and told reporters after arriving on Capitol Hill that “we’re going to get this done,” as Senate Democrats reached a budget agreement on late Tuesday for spending $3.5 trillion on “human infrastructure” that will include spending on issues like climate change, healthcare and other programs.
Economic Data
The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for final demand rose 1% in June, surpassing the consensus estimate of a rise of 0.6%, and also higher than the May reading of 0.8%.
The core PPI, which excludes food and energy, also rose 1% in June, surpassing the consensus estimate of a rise of 0.4%, but compared to a rise of 1.1% in May.
The Energy Information Administration reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ending Jul 9, decreased by 7.9 million barrels per day from the previous week. The report stated that crude oil inventories are below the five-year average by about 8%.
The U.S. Federal Reserve published its Beige Book on Wednesday wherein it was stated that from late May to early July, the U.S. economy strengthened further and witnessed a moderate to robust growth. Sectors like travel and tourism, transportation, non-financial services and manufacturing reported above-average growth.
The report further stated that three quarters of districts reported slight or modest job gains while the remainder of districts reported moderate or strong growth in employment. Prices also increased at a pace that was above-average with seven districts reporting strong growth in price while the remainder witnessed moderate gains.
Stocks That Made Headline
Ryder System Rewards Shareholders With 3.6% Dividend Hike
Reflective of improving conditions in the United States, as economic activities gather pace, Ryder System, Inc. (R - Free Report) — one of leading players in the Equipment and Leasing space — announced 3.6% hike in its quarterly dividend payout to $0.58 per share (annualized $2.32). (Read More)