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U.S. Stocks Pull Back Off Best Levels But Remain Mostly Positive

wallstreet sep4 27jul20 lt

After showing a strong move to the upside early in the session, stocks have given back some ground over the course of the trading day on Monday. The major averages have pulled back off their best levels of the day but remain in positive territory.

The major averages have moved back to the upside in recent trading. The Dow is up 77.80 points or 0.3 percent at 26,547.69, the Nasdaq is up 78.77 points or 0.8 percent at 10,441.95 and the S&P 500 is up 11.53 points or 0.4 percent at 3,227.16.

The strength on Wall Street partly reflects optimism about additional fiscal stimulus after Treasury Secretary Steven Mnuchin said Republicans have finalized their new coronavirus relief legislation.

Mnuchin told "Fox News Sunday" the GOP intends to introduce the $1 trillion bill on Monday after delaying the planned rollout last week.

Despite the vast gap in the price tags of the Republican plan and a $3 trillion bill passed by the Democrat-controlled House, Mnuchin said he expects lawmakers can move "very quickly" to address the differences.

"We've moved quickly before and I see no reason why we can't move quickly again," Mnuchin said. "And if there are issues that take longer, we'll deal with those as well."

In a separate interview with CNN's "State Of The Union," White House economic advisor Larry Kudlow said the GOP relief bill includes another $1,200 stimulus payment to Americans.

Traders are also digesting a Commerce Department report showing durable goods orders continued to move sharply higher in the month of June.

The Commerce Department said durable goods orders surged up by 7.3 percent in June after skyrocketing by a downwardly revised 15.1 percent in May. The continued increase comes following the nosedive seen in March and April.

Economists had expected durable goods orders to soar by 7.2 percent compared to the 15.7 percent spike that had been reported for the previous month.

Excluding another substantial increase in orders for transportation equipment, durable goods orders still jumped by 3.3 percent in June after shooting up by 3.6 percent in May. Ex-transportation orders were expected to surge up by 3.5 percent.

Sector News

Gold stocks have pulled back off their best levels but continue to see substantial strength in mid-day trading. After reaching its best intraday level in over seven years, the NYSE Arca Gold Bugs Index is up by 4.2 percent.

The rally by gold stocks comes as the price of the precious is spiking to a new record high, with August delivery soaring $36.40 to $1,933.90 an ounce.

Significant strength also remains visible among semiconductor stocks, as reflected by the 2.1 percent jump by the Philadelphia Semiconductor Index.

Taiwan Semiconductor (TSM) continued to post a standout gain after a report from the China Times said Intel (INTC) has placed orders with the chipmaker for 6-nanometer chips.

Steel, computer hardware, and housing stocks are also seeing considerable strength, while weakness among natural gas utilities and banking stocks has helped to limit the upside for the markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slipped by 0.2 percent, while China's Shanghai Composite Index rose by 0.3 percent.

The major European markets also ended the day mixed. While the German DAX Index closed just above the unchanged line, the U.K.'s FTSE 100 Index dipped by 0.2 percent and the French CAC 40 Index fell by 0.3 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 0.582 percent.

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