Dow up and on track for best first half year since 2019

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U.S. stock indexes were trading mixed Wednesday, with the Dow and S&P 500 edging higher, but the Nasdaq Composite slipping, in the final session of the month and first half of the year.

The three major U.S. stock indexes are on track for the best first half year performance since 2019, according to Dow Jones data.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average DJIA, +0.48% traded up 131 points to reach 34,424, a gain 0.4%.
  • The S&P 500 index SPX, +0.06% was up 2 points, or less than 0.1%, to 4,294, buoyed by an advance in consumer staples XLP, +0.61%, discretionary XLY, +0.20% and energy XLE, +1.00% sectors.
  • The Nasdaq Composite Index COMP, -0.14% was down 15 points, or off 0.1%, at 14,512.

On Tuesday, the S&P 500 notched its 33rd record close of 2021, adding 1.19 points, or less than 0.1%, to 4,291.80; the Nasdaq Composite advanced 27.83 points, or 0.2%, to a record close of 14,528.33, its 19th record of the year. The Dow closed up 9.02 points, or less than 0.1%, to 34,292.29.

What’s driving the market?

The Dow was making up lost ground this week, while the broader market was taking a pause from a rally that has pushed equity indexes to all-time highs on gains in technology and growth stocks.

The recent rally has been at least partly fueled by easing fears about the pace of inflation as the economy recovers from the COVID pandemic with benchmark bond yields remaining in a range for several weeks.

Early Wednesday, investors were parsing a monthly report on U.S. private-sector employment that showed that 692,000 jobs were added in June, setting the stage for the more closely followed Labor Department report on Friday.

The Automatic Data Processing Inc. ADP, +0.46% had been expected to show that the U.S. added 550,000 private-sector jobs in June, according to a consensus of forecasts from economists surveyed by Dow Jones and MarketWatch, following a 978,000 gain in May.

The June report said that hiring grew the most in the hospitality sector, which increased by 332,000. Meanwhile, the May employment count was reduced to 882,000 from the initially reported 978,000, though that still left it as the best month since September 2020.

“The private-sector payrolls may have beat the mark this month, but keep in mind it’s much lower than the downwardly revised number from May,” wrote Mike Loewengart, director investment strategy at E-Trade Financial in emailed commentary Wednesday.

“With hospitality jobs making up for lost time and notching the biggest gains this month, we’re seeing signs of life when it comes to economies reopening across the country,” the strategist wrote.

Employment has become a major focus for markets as investors try to determine how improvements in the labor market could influence the Federal Reserve’s policy plans.

Late Tuesday, Federal Reserve Gov. Christopher Waller told Bloomberg TV that the “unemployment rate would have to drop fairly substantially, or inflation would have to really continue at a very high rate, before we would take seriously a rate hike in 2022,” but added that he is not ruling out such a move, noting that it is appropriate to think about scaling back the Fed’s monthly purchases of $120 billion in assets, starting with a reduction of $40 billion in mortgage-backed securities.

Separately, a measure of business conditions in the Chicago region rose at a slightly slower pace in June, one month after reaching its highest level in 47 years, a trade group said Wednesday. The Chicago Business Barometer, also known as the Chicago PMI, fell to 66.1  in June from 75.2 in the prior month, which had been the highest reading since December 1983. The June reading is the lowest since February.

A report on pending home sales, meanwhile, rose 8% in May compared with April, the National Association of Realtors reported Wednesday. Economists polled by MarketWatch had projected a 1% decrease for pending home sales in May.

The data come after S&P CoreLogic Case-Shiller National Home Price Index, showed that prices surged at their fastest pace ever in April, as buyers competed for a limited number of homes.

The national home price index recorded an increase of 14.6% over the past year, representing the highest reading since in the more than 30 years of S&P CoreLogic Case-Shiller data. The separate 20-city index, which gauges home prices across a group of major cities across the country, increased at over the past year by 14.9% in April, well past the 13.3% growth recorded the month prior.

Which companies are in focus?
  • General Mills IncGIS saw sales and earnings drop in its latest quarter as people failed to buy as much food for the home as they did in the early days of the pandemic.
  • Xometry IncXMTR, an AI-driven marketplace for on-demand manufacturing, said its initial public offering priced at $44 a share, above its proposed price range of $38 to $42. 
  • IncLZ, said Wednesday its initial public offering priced at $28 a share, above its proposed price range of $24 to $27 each.
  • Broadband provider Wow Internet, Cable & Phone WOW said Wednesday it has entered two agreements to sell five service areas for a total of $1.8 billion. 
  • Torrid Holdings IncCURV, a direct-to-consumer provider of plus-size women’s clothing, upsized its planned initial public offering on Wednesday, with plans to offer 10 million shares priced at $18 to $21 each, up from an earlier plan to offer 8 million shares.
  • Luckin Coffee IncLKNCY stock jumped Wednesday trading after the Chinese-based coffee purveyor released its restated fourth-quarter 2019 financial results.
  • Sinovac Biotech LtdSVA, said Wednesday that a Phase 1/2 clinical trial of its COVID-19 vaccine in children and adolescents between the ages of 3 and 17 demonstrated that the shot is safe and produced a strong antibody response, according to a study published Monday in the medical journal The Lancet Infectious Diseases.
  • ConocoPhillips COP said Wednesday that it is adding $1 billion to its share buyback program for 2021, boosting its planned distributions to shareholders for the year to about $6 billion, or 7% of its current market cap.
How are other assets faring?
  • The yield on the 10-year Treasury note TMUBMUSD10Y was down 4 basis points Wednesday at around 1.44%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.3%.
  • Oil futures were on the rise, with the U.S. benchmark CL00 up 0.7% at $73.49 a barrel. Gold futures GC00 were trading 0.4% lower to $1,755.80 an ounce.
  • In European equities, the pan-Continental Stoxx 600 SXXP was declining 0.5% while London’s FTSE 100 UKX, -0.71% was down 0.5%.
  • In Asia, the Shanghai Composite SHCOMP closed 0.5% higher and Hong Kong’s Hang Seng Index HSI finished 0.6% lower, while Japan’s Nikkei 225 NIKwas off less than 0.1%.