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S&P 500 Cuts Losses to Clinch Record Highs

Stock MarketsAug 16, 2021 03:26PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 cut losses to hit all-time highs on Monday, shrugging off offset weakness in economically-sensitive cyclical stocks despite growing concerns about slowing global growth

The S&P 500 rose 0.1%, to a new record intraday high of 4,475.05. The Dow Jones Industrial Average gained 0.2%, or 56 points, the Nasdaq was down 0.26%.

Energy fell more than 1%, dragging the broader the market lower, as oil prices slumped on demand concerns after softer economic data from China triggered concerns about the global recovery.

"In the short term, concerns about the spread of the Delta variant in China, and the effects this will have on oil demand, are continuing to weigh on prices," Commerzbank (DE:CBKG) said in a note. "These concerns were additionally fuelled by data published overnight in China: industrial production turned out to be significantly softer than anticipated."

In another sign of slowing growth, The August Empire State index fell to 18.3 from 43.0 in July, missing economists' estimates of 28.5.

Treasury yields slipped on global growth concerns, pushing banking stocks sharply lower. Declining interest rates are the enemy of banks as it reduces their net interest margin.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) slipped less than 1%. 

But yields aren't expected to fall for a prolonged period because of a robust labor market, and the expected tightening of Federal Reserve monetary policy. 

"We are not losing confidence in our view that US Treasury yields and the US dollar are headed higher. Labor market strength and a powerful wealth effect should prevent the same loss of confidence in other household measures that was seen in the University of Michigan survey," Morgan Stanley (NYSE:MS) said in a note, adding that the "Fed taper [is] on tap."

Industrials were above flatline, however, as defense companies including Parker-Hannifin (NYSE:PH), L3Harris Technologies (NYSE:LHX), and Leidos (NYSE:LDOS) climbed.   

Technology stocks, often a benefactor of falling yields, gained slightly as megacap tech was mostly higher. 

Microsoft (NASDAQ:MSFT, Facebook (NASDAQ:FB), and Apple (NASDAQ:AAPL), Google-parent Alphabet (NASDAQ:GOOGL) were in the green, while Amazon.com (NASDAQ:AMZN) was flat.

Sonos (NASDAQ:SONO), meanwhile, jumped 7% after a winning a judge ruled that Alphabet's Google had infringed on some of the company's patents. An important ban could be imposed for some of Google's Pixel smartphones and Nest audio speakers.

In earnings news, oat milk producer Oatly (NASDAQ:OTLY) reported quarterly results that fell short of the Wall Street estimates on both the top and bottom lines. The company also announced plans to boost oat base production, citing increased demand. Its share price was fell about 3%.

In other news, Tesla (NASDAQ:TSLA) fell more than 4% after the U.S. government launched an investigation into safe of the electric automaker's driver assistance system after a multiple of crashes during the last three years.

S&P 500 Cuts Losses to Clinch Record Highs
 

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Comments (12)
Max German
MaxiGE Aug 16, 2021 4:21PM ET
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no algo to great for this market nothing matters only american optimism asia isnt buying and europe gets bought by the us banks in orders again 7.2M orders pmaced on europe stocks thats average 40% of europe volume of tommorow already lol
MK MK
MK MK Aug 16, 2021 4:21PM ET
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Why do call silliness of yankees optimism?
soho electronics
soho electronics Aug 16, 2021 4:15PM ET
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how can the Dow constantly break records??
Millennial Metals
Millennial Metals Aug 16, 2021 4:06PM ET
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You cannot print your way to prosperity. I feel so bad for the generations who have to deal with the upcoming hyperinflation
Matt Kay
Matt Kay Aug 16, 2021 3:32PM ET
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S&P500 officially doubled in size since varus crash last year. Printer does, indeed, go BRRRR
michael engel
michael engel Aug 16, 2021 3:32PM ET
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Less money for the Taliban more for AOC. Results : the same !!
Jon Bal
Jon Bal Aug 16, 2021 3:20PM ET
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guess ill add terrorist group taking over a country to my buy signal list
michael engel
michael engel Aug 16, 2021 3:20PM ET
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mini Millie fired.
Max German
MaxiGE Aug 16, 2021 3:05PM ET
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the corruption is huge nothing can let this pullback means it will crash
Michael Angelo
Michael Angelo Aug 16, 2021 2:56PM ET
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Sold earlier, call customer service. And the lines are busy.
Larry DeAngelis
Larry DeAngelis Aug 16, 2021 2:54PM ET
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All the stocks are down and the market going straight up! Time for an investigation!
Amo Laizer
Amo Laizer Aug 16, 2021 2:45PM ET
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okay
Lawrenti Berija
Lawrenti Berija Aug 16, 2021 2:22PM ET
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that's a surprise.
 
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