S&P 500 stalls in economic data offset, ahead of Fed chair's speech

By April Joyner NEW YORK (Reuters) - The benchmark S&P 500 ended little changed on Thursday as a fall in U.S. jobless claims offset data showing a contraction in U.S.

Reuters August 23, 2019 04:05:44 IST
S&P 500 stalls in economic data offset, ahead of Fed chair's speech

SP 500 stalls in economic data offset ahead of Fed chairs speech

By April Joyner

NEW YORK (Reuters) - The benchmark S&P 500 ended little changed on Thursday as a fall in U.S. jobless claims offset data showing a contraction in U.S. manufacturing activity while investors awaited Federal Reserve Chair Jerome Powell's speech on Friday for clues on the central bank's monetary policy.

Data from the U.S. Labor Department showed initial claims for state unemployment benefits dropped more than expected last week, suggesting the labour market was holding firm despite a manufacturing slowdown and concerns the economy is on a path toward recession.

However, IHS Markit's Flash Purchasing Managers' Index showed manufacturing activity contracting in August for the first time in nearly a decade. The reading prompted concern among some investors that economic weakness abroad and an escalating trade war with China could drag down the U.S. economy. Following the data release, the yield curve between two-year and 10-year Treasury notes briefly inverted.

"The fact that manufacturing didn't just slow down but contracted, that was a little surprising," said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.

Yet, Pursche said, "you had decent unemployment claims, they were slightly better than expected, so that's a counter act. That's why we don't expect there to be any kind of deep recession."

For much of the session, the S&P 500 oscillated between gains and losses. Several market strategists said investors were pausing ahead of Fed Chair Powell's speech on Friday at an annual gathering of central bankers in Jackson Hole, Wyoming, which is expected to yield some clues on whether the Fed will cut interest rates further.

The benchmark index dipped lower in intraday trade after Philadelphia Fed President Patrick Harker and Kansas City Fed President Esther George hinted at less dovish stances, saying the U.S. economy does not need more stimulus at this point.

Those comments, coupled with the disappointing manufacturing data and the brief yield curve inversion, would in other circumstances be a "recipe for a sell-off," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

But, he said, "it boils down to the fact that it's the eve of a big event. The market wants to go into Jackson Hole on an even keel."

The Dow Jones Industrial Average <.DJI> rose 49.51 points, or 0.19%, to 26,252.24, the S&P 500 <.SPX> lost 1.48 points, or 0.05%, to 2,922.95 and the Nasdaq Composite <.IXIC> dropped 28.82 points, or 0.36%, to 7,991.39.

Shares of Nordstrom Inc jumped 15.9%, the biggest percentage gain on the S&P 500, after the department store's quarterly profit beat estimates, joining Target Corp and Lowe's Cos Inc in delivering upbeat retail numbers.

The Dow received a boost from Boeing Co shares, which rose 4.2% as Reuters reported the planemaker is looking to increase production of its grounded 737 MAX jets as early as October, suggesting the aircraft's return to service may be on track for the fourth quarter.

Declining issues outnumbered advancing ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favoured decliners.

The S&P 500 posted 40 new 52-week highs and five new lows; the Nasdaq Composite recorded 61 new highs and 66 new lows.

Volume on U.S. exchanges was 5.65 billion shares, compared to the 7.48 billion average for the full session over the last 20 trading days.

(Reporting by April Joyner; Additional reporting by Akanksha Rana and Medha Singh in Bengaluru; Editing by Tom Brown and Chris Reese)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.