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Stock Market News for Jul 28, 2023

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U.S. stock markets closed lower on Thursday, following a choppy trading session that saw investors weigh a slew of economic data. The second-quarter gross domestic product (GDP) turned out higher than expectations and corporate earnings came in mixed. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.67% or 237.40 points to close at 35,282.72. Notably, nine components of the 30-stock index ended in positive territory, while 21 were in the negative zone. The blue-chip index fell after an impressive streak of 13 consecutive gains.

The tech-heavy Nasdaq Composite finished at 14,058.87, slipping 0.55% due to the weak performance of large-cap technology stocks. The major loser of the tech-laden index was eBay Inc. ((EBAY - Free Report) ) after seeing a 10.5% decline in stock price. eBay currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 fell 0.64% due to the weak performance of real estate stocks to end at 4,537.41. Ten out of 11 broad sectors of the benchmark ended in negative territory, while one finished in the positive zone.

The Real Estate Select Sector SPDR (XLRE) tumbled 2.1%, the Financials Select Sector SPDR (XLF) dropped 1.3%, and the Consumer Discretionary Select Sector SPDR (XLY) fell 1%.On the other hand, the Communication Services Select Sector SPDR (XLC) gained 0.8%.

The fear-gauge CBOE Volatility Index (VIX) increased 9.3% to 14.41.

GDP Surpasses Expectations, Grows 2.4%

The Bureau of Economic Analysis (BEA) released its early estimate for U.S.GDP for the second quarter, showing that the economy expanded at an annualized rate of 2.4%, beating expectations. Compared to the first quarter, which had a revised GDP of 2%, the economy performed better in the second quarter.

The driving forces behind this growth were increased consumer spending and nonresidential fixed investment, which includes spending on commercial real estate and equipment. Services spending saw a boost in housing and utilities, as well as healthcare. As for goods spending, recreational goods, vehicles, and gasoline showed significant gains.

Economic Data

The Department of Commerce reported that durable goods orders surged 4.7% in July compared to the consensus estimate of an increase of 2.1%. May’s data was revised upward to 2% from 1.7% reported earlier.

The core new orders (excluding transportation and government spending on military equipment) rose 0.6%. This metric is viewed as an indication of whether business prospects are good or bad. Business investment climbed 6.2% year over year.

Pending Home Sales increased 0.3% in June in contrast to the consensus estimate of a decline of 0.5%. May’s data was revised downward to 2.7% from 2.5% reported earlier.

The Department of Labor reported that weekly jobless claims decreased by 7,000 to 221,000 for the week ended Jul 22, missing the consensus estimate of 235,000. The 4-week moving average was 233,750, marking a decrease of 3,750 from the previous week’s unrevised average of 237,500.

Continuing claims — people who already received government unemployment benefit and run a week behind the headline number — came in at 1,690,000. This marked a decrease of 59,000 for the week ended Jul 15.
 


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