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Stock Market News for Aug 19, 2021

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U.S. stocks closed lower for the second straight day on Wednesday as investors worried following the release of the minutes of the Fed Reserve’s policy meeting last month that showed that central bank could cut down on the monetary support later this year. All the three major indexes finished in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) declined 1.1% or 382.59 points to end at 34,960.69 points.

The S&P 500 slid 1.1% or 47.81 points to finish at 4,400.26 points. Both the Dow and the S&P 500 had snapped their five-day winning streak in the previous session.

Almost all the sectors took a hit, with energy and technology sectors turning out to be the worst performers. The Energy Select Sector SPDR (XLE) fell 2.1%, while the Technology Select Sector SPDR (XLK) declined 1.4%. Ten of the 11 sectors of the benchmark index closed in negative territory.

The tech-heavy Nasdaq slid 0.9% or 130.27 points to close at 14,525.91 points. Shares of Apple, Inc. (AAPL - Free Report) and Facebook, Inc. (FB - Free Report) declined 2.6% and 0.9%, respectively. Apple carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The fear-gauge CBOE Volatility Index (VIX) was up 20.44% to 21.57. A total of 8.8 billion shares were traded on Wednesday, lower than the last 20-session average of 9.15 billion. Decliners outnumbered advancers on the NYSE by a 2.43-to-1 ratio. On Nasdaq, a 1.46-to-1 ratio favored declining issues.

Fed Reserve’s Policy Meeting Minutes Raise Investors’ Concern

The Fed published the minutes of its July27-28 policy meeting that revealed discussion revolving around the time when the central bank would pull back on its monthly bond-buying program this year. The minutes revealed that lawmakers discussed plans of reducing the Fed’s monthly asset purchase of $120 billion in Treasurys and mortgage-backed securities, which is likely to come by the end of this year.

However, they also indicated that interest rates could still be as low as near zero for at least some more time. Following the release of the minutes, investors started weighing on the possible time the central bank pulls back on the easy monetary policy.

Earlier this week, there were reports that the Fed could start scaling back bond-buying program around November. This sent stocks lower and gold higher, with several feeling hesitant as they believed that a premature pullback could hamper the economic recovery.

Also, geopolitical tensions following Taliban’s seize of power in Afghanistan added to the worries, despite impressive earnings reports by some of the big retailers.

Economic Data 

In economic data released on Wednesday, housing starts declined 7% in July to a seasonally adjusted annual rate of 1.534 million units, missing analysts’ expectations, according to the U.S. Census Bureau. However, building permits for new homes increased 2.6% in July on a month-over-month basis, and 6% from a year ago, to a seasonally adjusted annual rate of 1.64 million.


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