US stocks generally up as strong economic data bolsters sentiment ahead of Powell speech

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U.S. stocks traded mixed midday on Thursday, with the S&P 500 and Nasdaq Composite heading for back-to-back gains after a string of strong economic data as investors awaited news from Federal Reserve Chairman Jerome Powell.

How Stocks Trade

  • S&P500
    SPX

    rose 18 points, or 0.4%, to 4,158.

  • Dow Jones Industrial Average
    DJIA

    lost 3 points, or less than 0.1%, to 32,966.

  • Nasdaq Compound
    COMP

    advanced 89 points, or 0.7%, to 12,520.

On Wednesday, the Dow Jones Industrial Average rose 60 points, or 0.18%, to 32969, the S&P 500 rose 12 points, or 0.29%, to 4141, and the Nasdaq Composite gained 50 points, or 0.41%, to 12,432. The S&P 500 is up 12.9% from its mid-June low, but remains down 13.1% year-to-date.

What drives the markets?

U.S. stocks were mostly higher on Thursday after revised readings on the performance of the U.S. and German economies in the second quarter, as well as news from more fiscal stimulus from China. However, the low trading volume contributed to exaggerated fluctuations during the day.

A revised reading of second-quarter gross domestic product showed Germany the economy grew 0.1% in the second quarter, which was better than economists expected. Meanwhile, in the United States, the first revision of second quarter GDP the figures showed the economy shrank just 0.6%, better than the 0.9% contraction from the initial reading.

See: GDP fell 0.6% year-on-year in the second quarter, but it wasn’t all bad news

Eric Diton, chairman and chief executive of the Wealth Alliance, said U.S. stocks had good reason to celebrate the latest second-quarter GDP reading.

“The underlying data is not showing a recession, and that’s pretty ideal for this market because this market is praying for a soft landing,” Diton said.

Stocks are also facing low trading volume, which has helped exaggerate market swings. Wednesday’s session saw just 8.8 billion shares traded across Wall Street’s various exchanges. This is the lowest volume so far this year and a 26% decline from the 2022 daily average, according to Dow Jones data.

Market strategists blamed the low trading volume on seasonal factors, as well as some investors’ reluctance to make bold bets before Powell spoke at the Kansas City Fed’s annual economic symposium in Jackson Hole on Friday. , Wyo.

Investors will dissect Powell’s comments for clues about the Fed’s policy direction, an issue that has largely determined the market’s trajectory of late.

The market got another taste of the Fed speech on Thursday when Philadelphia Fed President Patrick Harker said he would like to see the Fed raise its benchmark target rate north of 3.4% and then let it “rest for a while.”

In other economic news, the number of Americans applying for unemployment benefits last week fell to a one-month low of 243,000, indicating layoffs remain near record lows.

See: Unemployment claims fall to one-month low of 243,000 with no signs of rising layoffs

Investors were also grappling with a decidedly mixed bag of earnings reports from a handful of tech companies released after Wednesday’s closing bell. Shares in Selling power
RCMP

fell by nearly 7% while Snowflake
SNOW,

on the other hand, rose more than 16% after its figures and forecasts were well received.

Meanwhile, Tesla Inc.
TSLA

the shares traded slightly lower, erasing their earnings from the pre-market session, as a stock split took effect at the opening. The electric vehicle maker’s board of directors approved the 3-for-1 split on Aug. 5.

Actions in the spotlight

  • U.S.-listed Chinese stocks rallied after a Wall Street Journal report that US and Chinese regulators are close to reaching an agreement allowing US auditors to travel to Hong Kong to inspect the records of Chinese companies listed in New York. Shares of Alibaba Group Holding Ltd.
    BABA

    rallied more than 7%. Shares of iQiyi Inc.
    IQ

    gained 6.9%, shares of JD.com Inc.
    J.D.

    Bilibili Inc. and and Huya Inc.
    COME ON

    each increased by more than 8%. Shares of an electric vehicle company NIO inc..
    NIO

    gained more than 5%.

  • Shares of Interactive Peloton Inc.
    PTON
    plunged almost 20% after the company posted a significant loss for his last trimester. A day ago, the stock rallied on news that the company would start selling its products on Amazon.com.

  • Nvidia Corporation NVDA shares traded higher despite disappointing results out Wednesday night. Other semiconductor companies also benefited, with Advanced Micro Devices Inc. AMDand Micron Technology Inc. INboth among the biggest winners in the S&P 500 with gains of more than 4%.

  • NetApp Inc.,
    NTAP

    a provider of enterprise data, storage and cloud management, rose more than 6% after a strong earnings report.

  • Royal Caribbean Group
    RLC

    and Norwegian Cruise Line Holdings
    NCLH

    increased by 3.9% and 4.5% respectively.

How are the other assets doing?

  • Oil futures were lower than US crude
    CL

    fell 1% to $94.96 a barrel.

  • The 10-year Treasury yield
    BX:TMUBMUSD10Y

    fell 2.9 basis points to 3.083%.

  • The ICE Dollar Index
    DXY

    fell 0.2% to 108.50, while gold
    GC00

    rose 0.4% to $1,768 an ounce.

  • Bitcoin
    BTCUSD

    rose 1.8% to $21,746.

  • Asian markets have benefited from the latest stimulus in China. Hong Kong’s Hang Seng
    Hong Kong: HSI

    rose 3.6% and the Shanghai Composite
    CN:SHCOMP

    increased by 1%. In Europe, the Euro Stoxx 600
    XX:XXXP

    increased by 0.4%.

— Jamie Chisholm contributed to this article.

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