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Wall Street closed higher on Wednesday buoyed by strong earnings results and better-than-expected economic data. Rise in bond yields also boosted financial stocks. All three major stock indexes ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% to close at 35,405.50, reflecting the blue-chip index’s four-day winning streak. Notably, 16 components of the 30-stock index ended in the green while 14 in red.
Moreover, the tech-heavy Nasdaq Composite finished at 15,041.86, gaining 0.1% due to strong performance by large-cap stocks. This marked 30th closing high year to date. The tech-laden index hit an all-time high of 15,059.43 in intraday trading. The index rallied for five days in a row.
Meanwhile, the S&P 500 moved up 0.2% to end at 4,496.19, marking a new closing high. The broad-market index hit an all-time high of 4,501.71 in intraday trading, reflecting its 51st all-time highs this year. The index rallied for five days in a row.
The index touched the technical barrier of 4,500 for the first time in history. The Financials Select Sector SPDR (XLF) rallied 1.2%. Seven out of eleven sectors of the benchmark index closed in positive territory while four in red.
The fear-gauge CBOE Volatility Index (VIX) was down 2.5% to 16.79. A total of 8.29 billion shares were traded on Wednesday, lower than the last 20-session average of 9 billion. Advancers outnumbered decliners on the NYSE by a 1.49-to-1 ratio. On Nasdaq, a 1.31-to-1 ratio favored advancing issues.
Hike in Treasury Yield
The yield on the benchmark 10-Year U.S. Treasury Note moved up to 1.352, its highest since early this month when the yield was hovering around 1.364%. A hike in market’s risk-free interest rate will raise the cost of funds, which in turn will enable the financial sector, especially banks, to widen the spread between longer-term assets, such as loans, with shorter-term liabilities, thus boosting the sector’s profits margin.
As we are winding up the second-quarter 2021 earnings session, profits of the market’s benchmark S&P 500 Index are likely to hit 13-year high this year. This earnings season has witnessed broad-based growth, significant acceleration of revenues and continued positive revisions to estimates for the third quarter.
Dick's Sporting Goods Inc. (DKS - Free Report) came out with quarterly earnings of $5.08 per share, beating the Zacks Consensus Estimate of $2.80 per share. Revenues of $3.27 billion, surpassed the Zacks Consensus Estimate by 15.54%.
Toll Brothers Inc. (TOL - Free Report) reported earnings of $1.87 per share, surpassing the Zacks Consensus Estimate of $1.52. Revenues of $2.26 billion topped the consensus mark of $2.22 billion.
As a result, shares of Dick’s and Toll Brothers soared 13.3% and 4.3%, respectively.
Economic Data
The Department of Commerce reported that the durable goods orders fell 0.1% in July after gaining 0.8% in June. However, the consensus estimate was for a drop of 0.5%. Moreover, new orders for core capital goods (non-defense capital goods excluding aircraft) remained same in July after rising 1% in June. This metric is a closely watched proxy for business investment plan. Shipments of core capital goods rose 1% in July after rising 0.6% in June. This metric is used to calculate equipment spending in the GDP measurement.
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Stock Market News for Aug 26, 2021
Wall Street closed higher on Wednesday buoyed by strong earnings results and better-than-expected economic data. Rise in bond yields also boosted financial stocks. All three major stock indexes ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% to close at 35,405.50, reflecting the blue-chip index’s four-day winning streak. Notably, 16 components of the 30-stock index ended in the green while 14 in red.
Moreover, the tech-heavy Nasdaq Composite finished at 15,041.86, gaining 0.1% due to strong performance by large-cap stocks. This marked 30th closing high year to date. The tech-laden index hit an all-time high of 15,059.43 in intraday trading. The index rallied for five days in a row.
Meanwhile, the S&P 500 moved up 0.2% to end at 4,496.19, marking a new closing high. The broad-market index hit an all-time high of 4,501.71 in intraday trading, reflecting its 51st all-time highs this year. The index rallied for five days in a row.
The index touched the technical barrier of 4,500 for the first time in history. The Financials Select Sector SPDR (XLF) rallied 1.2%. Seven out of eleven sectors of the benchmark index closed in positive territory while four in red.
The fear-gauge CBOE Volatility Index (VIX) was down 2.5% to 16.79. A total of 8.29 billion shares were traded on Wednesday, lower than the last 20-session average of 9 billion. Advancers outnumbered decliners on the NYSE by a 1.49-to-1 ratio. On Nasdaq, a 1.31-to-1 ratio favored advancing issues.
Hike in Treasury Yield
The yield on the benchmark 10-Year U.S. Treasury Note moved up to 1.352, its highest since early this month when the yield was hovering around 1.364%. A hike in market’s risk-free interest rate will raise the cost of funds, which in turn will enable the financial sector, especially banks, to widen the spread between longer-term assets, such as loans, with shorter-term liabilities, thus boosting the sector’s profits margin.
Consequently, shares of major banks like JPMorgan Chase & Co. (JPM - Free Report) and Wells Fargo & Co. (WFC - Free Report) gained 2.1% and 1.9%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Robust Q2 Earnings
As we are winding up the second-quarter 2021 earnings session, profits of the market’s benchmark S&P 500 Index are likely to hit 13-year high this year. This earnings season has witnessed broad-based growth, significant acceleration of revenues and continued positive revisions to estimates for the third quarter.
Dick's Sporting Goods Inc. (DKS - Free Report) came out with quarterly earnings of $5.08 per share, beating the Zacks Consensus Estimate of $2.80 per share. Revenues of $3.27 billion, surpassed the Zacks Consensus Estimate by 15.54%.
Toll Brothers Inc. (TOL - Free Report) reported earnings of $1.87 per share, surpassing the Zacks Consensus Estimate of $1.52. Revenues of $2.26 billion topped the consensus mark of $2.22 billion.
As a result, shares of Dick’s and Toll Brothers soared 13.3% and 4.3%, respectively.
Economic Data
The Department of Commerce reported that the durable goods orders fell 0.1% in July after gaining 0.8% in June. However, the consensus estimate was for a drop of 0.5%. Moreover, new orders for core capital goods (non-defense capital goods excluding aircraft) remained same in July after rising 1% in June. This metric is a closely watched proxy for business investment plan. Shipments of core capital goods rose 1% in July after rising 0.6% in June. This metric is used to calculate equipment spending in the GDP measurement.