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Green day on Wall Street as investors embrace risk
08-Aug-19 16:20 ET
Dow +371.12 at 26378.19, Nasdaq +176.33 at 8039.17, S&P +54.11 at 2938.09

https://www.briefing.com/investor/markets/stock-market-update/2019/8/8/green-day-on-wall-street-as-investors-embrace-risk.htm

[BRIEFING.COM] The stock market finished decisively in the green on Thursday, as trade angst subsided and investors embraced a risk-on mindset. The S&P 500 advanced 1.9%, which extended its two-day comeback to 112 points, or 4.0%, from its session low on Wednesday.

The Dow Jones Industrial Average increased 1.4%, the Nasdaq Composite increased 2.2%, and the Russell 2000 increased 2.1%.

Thursday's positive disposition ostensibly formed overnight after China reported a surprise yr/yr increase in July exports while holding its yuan firm, which again signaled goodwill in trade relations. Today's rally, however, appeared to be more a continuation from yesterday's big intraday reversal that suggested the recent sharp sell-off may have been excessive.

Interestingly, the S&P 500 traded just below its 50-day moving average (2934) for most of the afternoon before finally breaking above the key technical level late in the session. The benchmark index held above the level on a closing basis.

All 11 S&P 500 sectors finished higher by at least 1.0%. The energy sector (+2.9%) led the advance as oil prices ($52.52/bbl, +$1.38, +2.7%) rebounded, followed by the information technology (+2.4%), communication services (+2.2%), and consumer discretionary (+2.0%) sectors.

Advanced Micro Devices (AMD 33.92, +4.73, +16.2%) led the Philadelphia Semiconductor Index (+2.7%) higher after it unveiled its well-received server CPUs that Google and Twitter will reportedly use. Broadcom (AVGO 270.98, +0.93, +0.3%) struggled to participate in the chip rally amid news that it is close to purchasing Symantec's (SYMC 22.92, +2.51, +12.3%) enterprise business for about $10 billion

In earnings news, Booking Holdings (BKNG 1941.01, +119.45, +6.6%), Lyft (LYFT 62.10, +1.81, +3.0%), and Roku (ROKU 122.03, +21.06, +20.9%) outperformed the broader market following positive results and/or upbeat guidance. Kraft Heinz (KHC 28.22, -2.65, -8.6%) disappointed investors with its results, and its stock chart remained an eyesore for investors.

U.S. Treasuries were under noticeable selling pressure today, which sent the 10-yr yield up 11 basis points to 1.79% at one point during the session. Buyers gradually came back, ultimately leaving the benchmark yield up three basis points to 1.72%. The 2-yr yield finished also finished three basis points higher at 1.61%. The U.S. Dollar Index increased 0.1% to 97.60.

Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and Wholesale Inventories for June:

Initial jobless claims for the week ending August 3 decreased by 8,000 to 209,000 (Briefing.com consensus 213,000). Continuing claims for the week ending July 27 decreased by 15,000 to 1.684 mln.
The key takeaway from the report is that initial claims continue hovering near multi-decade lows.
Wholesale inventories were unchanged in June (Briefing.com consensus 0.2%) on top of an unrevised 0.4% increase in May. Wholesale sales decreased 0.3% in June after decreasing a revised 0.6% (from +0.1%) in May.
The key takeaway from the June report and the May revision is that the gap between inventory growth and sales growth is widening, which should exert some pressure on prices.

Looking ahead, investors will receive the Producer Price Index for July on Friday.

Nasdaq Composite +21.2% YTD
S&P 500 +17.2% YTD
Dow Jones Industrial Average +13.1% YTD
Russell 2000 +13.6% YTD