U.S. stocks pared losses, after the worst week in almost two months for the Standard & Poor’s 500 Index, as a rally among semiconductor stocks helped offset concerns about geopolitical unrest and the possible timing for interest-rate increases.
Semiconductor stocks in the S&P 500 climbed as Micron Technology Inc. and Intel Corp. gained at least 1.9 percent. DreamWorks Animation SKG Inc. jumped 27 percent as it is said to be weighing a takeover offer from SoftBank Corp. An S&P index of homebuilders retreated 0.8 percent as contracts to buy existing houses fell in August. Las Vegas Sands Corp. and Wynn Resorts Ltd. dropped more than 2.5 percent as casino companies slid.
The S&P 500 lost 0.1 percent to 1,980.73 at 3:28 p.m. in New York, trading near its 50-day moving average after paring an earlier drop of 1 percent. The Dow Jones Industrial Average slid 22.55 points, or 0.1 percent, to 17,090.60. The Nasdaq Composite Index was little changed. Trading in S&P 500 (SPX) companies was in line with the 30-day average for this time of the day.
“We’re in a giant yo-yo the past six sessions but central banks are still accommodative, U.S. growth is decent, the grind higher is still intact,” Michael Block, chief equity strategist at New York-based Rhino Trading Partners LLC, said in a phone interview. “We’re just hitting some bumps with macro issues.”
The S&P 500 is down 1.1 percent for the month, paring a gain for the quarter to 1.1 percent. It has not had a four-day losing streak this year and has not fallen more than 10 percent in three years.
100 Points
Swings in equities have widened at the end of the quarter, with the Dow (INDU) alternating between gains and losses of more than 100 points the last four days.
The Chicago Board Options Volatility Index, a gauge of investor trepidation derived from options, averaged 14.5 last week, 12 percent above its mean level during the third quarter. The VIX (VIX) added 5.5 percent to 15.67 today.
The S&P 500 slid 1.4 percent last week, the biggest decline in almost two months, amid an escalation in the Middle East conflict and a selloff in small-capitalized stocks and technology shares. It jumped 0.9 percent on Sept. 26 after a report showed the U.S. economy expanded in the second quarter at the fastest rate since 2011.
Economic Data
Data today showed consumer spending in the U.S. rebounded in August as further job gains encouraged households to loosen their purse strings. Purchases increased 0.5 percent last month after little change in July. Incomes increased 0.3 percent.
A report from the National Association of Realtors showed contracts to purchase previously owned homes declined in August as tighter credit and limited wage growth weigh on potential buyers. The pending home sales index dropped 1 percent after a 3.2 percent increase in July.
Investors are analyzing reports to assess whether economic growth is strong enough to withstand higher interest rates. The S&P 500 reached a record on Sept. 18 as the Fed maintained a commitment to keep interest rates near zero for a considerable time after completing asset purchases. The central bank also said that the timing could move forward if data continue to exceed expectations.
Interest Rates
The Fed mustn’t “fall behind the curve” as it weighs when to start raising interest rates, Dallas Fed President Richard Fisher said in a Fox News interview, citing strengthening U.S. growth and building wage-price pressures.
U.S. data on employment and output from the manufacturing and services industries are due this week, and companies next month will begin to report earnings for the third quarter. Alcoa Inc. unofficially kicks off the earnings season when it reports quarterly results on Oct. 8.
Stock markets overseas slumped today as tens of thousands of pro-democracy protesters poured back into the streets of Hong Kong to press demands for free and open elections. Pro-democracy protesters in Hong Kong pledged to continue demonstrations unless the city’s top official steps down.
The turmoil added to the crises around the globe that have weighed on equities. Ukraine’s army endured its deadliest day since signing a cease-fire with pro-Russian militants 3 1/2 weeks ago, straining efforts to find a lasting settlement to the six-month conflict in the nation’s east. Investors are also watching the situation in Syria, where the U.S. and its allies are carrying out strikes against Islamic State positions.
Brazil Election
Brazilian shares retreated more than 4 percent after a poll showed increased support for President Dilma Rousseff’s re-election bid. Traders are paring bets on the chances a new government will be elected next month and jump-start economic growth after the country fell into a recession in the first half of the year.
“Although we saw strong GDP numbers for the second quarter last week, there’s still a suspicion that unrest outside of our borders will impact economic growth here,” Jim Dunigan, chief investment officer at PNC Bank NA, which oversees $130 billion, said by phone from Philadelphia.
source: Bloomberg
Semiconductor stocks in the S&P 500 climbed as Micron Technology Inc. and Intel Corp. gained at least 1.9 percent. DreamWorks Animation SKG Inc. jumped 27 percent as it is said to be weighing a takeover offer from SoftBank Corp. An S&P index of homebuilders retreated 0.8 percent as contracts to buy existing houses fell in August. Las Vegas Sands Corp. and Wynn Resorts Ltd. dropped more than 2.5 percent as casino companies slid.
The S&P 500 lost 0.1 percent to 1,980.73 at 3:28 p.m. in New York, trading near its 50-day moving average after paring an earlier drop of 1 percent. The Dow Jones Industrial Average slid 22.55 points, or 0.1 percent, to 17,090.60. The Nasdaq Composite Index was little changed. Trading in S&P 500 (SPX) companies was in line with the 30-day average for this time of the day.
“We’re in a giant yo-yo the past six sessions but central banks are still accommodative, U.S. growth is decent, the grind higher is still intact,” Michael Block, chief equity strategist at New York-based Rhino Trading Partners LLC, said in a phone interview. “We’re just hitting some bumps with macro issues.”
The S&P 500 is down 1.1 percent for the month, paring a gain for the quarter to 1.1 percent. It has not had a four-day losing streak this year and has not fallen more than 10 percent in three years.
100 Points
Swings in equities have widened at the end of the quarter, with the Dow (INDU) alternating between gains and losses of more than 100 points the last four days.
The Chicago Board Options Volatility Index, a gauge of investor trepidation derived from options, averaged 14.5 last week, 12 percent above its mean level during the third quarter. The VIX (VIX) added 5.5 percent to 15.67 today.
The S&P 500 slid 1.4 percent last week, the biggest decline in almost two months, amid an escalation in the Middle East conflict and a selloff in small-capitalized stocks and technology shares. It jumped 0.9 percent on Sept. 26 after a report showed the U.S. economy expanded in the second quarter at the fastest rate since 2011.
Economic Data
Data today showed consumer spending in the U.S. rebounded in August as further job gains encouraged households to loosen their purse strings. Purchases increased 0.5 percent last month after little change in July. Incomes increased 0.3 percent.
A report from the National Association of Realtors showed contracts to purchase previously owned homes declined in August as tighter credit and limited wage growth weigh on potential buyers. The pending home sales index dropped 1 percent after a 3.2 percent increase in July.
Investors are analyzing reports to assess whether economic growth is strong enough to withstand higher interest rates. The S&P 500 reached a record on Sept. 18 as the Fed maintained a commitment to keep interest rates near zero for a considerable time after completing asset purchases. The central bank also said that the timing could move forward if data continue to exceed expectations.
Interest Rates
The Fed mustn’t “fall behind the curve” as it weighs when to start raising interest rates, Dallas Fed President Richard Fisher said in a Fox News interview, citing strengthening U.S. growth and building wage-price pressures.
U.S. data on employment and output from the manufacturing and services industries are due this week, and companies next month will begin to report earnings for the third quarter. Alcoa Inc. unofficially kicks off the earnings season when it reports quarterly results on Oct. 8.
Stock markets overseas slumped today as tens of thousands of pro-democracy protesters poured back into the streets of Hong Kong to press demands for free and open elections. Pro-democracy protesters in Hong Kong pledged to continue demonstrations unless the city’s top official steps down.
The turmoil added to the crises around the globe that have weighed on equities. Ukraine’s army endured its deadliest day since signing a cease-fire with pro-Russian militants 3 1/2 weeks ago, straining efforts to find a lasting settlement to the six-month conflict in the nation’s east. Investors are also watching the situation in Syria, where the U.S. and its allies are carrying out strikes against Islamic State positions.
Brazil Election
Brazilian shares retreated more than 4 percent after a poll showed increased support for President Dilma Rousseff’s re-election bid. Traders are paring bets on the chances a new government will be elected next month and jump-start economic growth after the country fell into a recession in the first half of the year.
“Although we saw strong GDP numbers for the second quarter last week, there’s still a suspicion that unrest outside of our borders will impact economic growth here,” Jim Dunigan, chief investment officer at PNC Bank NA, which oversees $130 billion, said by phone from Philadelphia.
source: Bloomberg