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Wall Street Opens Mixed as Weak Philly Fed Underpins Stimulus Hopes; Dow Flat

Published 05/20/2021, 09:37 AM
Updated 05/20/2021, 09:43 AM
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened mixed on Thursday, in a modest bounce from three straight days of losses after mixed economic data reassured market participants that the risk of the Federal Reserve withdrawing its stimulus this year was vanishingly smalll.

The Philadelphia Federal Reserve's main index of business conditions fell sharply to 52.7 from 66.6, according to data released earlier Wednesday, while the manufacturing index plummeted to 31.5 from over 50 a month ago. The index for prices paid by manufacturers hit a new 40-year high, but the indices for new orders and employment in manufacturing both fell

Combined with an unexpected rise in continuing jobless claims in the week through May 8, the numbers lent weight to the idea that evidence of the economy overheating is likely to be short-lived. 

Sentiment was also supported by a more vigorous rebound in crypto assets, relieving the pressure on many retail portfolios that had led to forced selling by leveraged accounts in Wednesday’s rout. Proxies for crypto exposure all recovered partially, with Coinbase Global  (NASDAQ:COIN) stock rising 2.3%, MicroStrategy (NASDAQ:MSTR) stock rising 6.0% and Square (NYSE:SQ) stock rising 1.4%.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was effectively flat at 33,873 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.9%. 

Among individual movers, Cisco Systems (NASDAQ:CSCO) stock fell 2.8% amid concerns that its strong last quarter could represent a cyclical high point. The maker of networking equipment said it expected margin pressure from the global chip shortage to last throughout the year. Ford.. another company to be hit by the global chip shortage, rose 4.4% stock, as the encouraging presentation of its electric F-150 model on Wednesday outweighed the news that it will have to stop production in a number of plants again in June.

Retail stocks were again in focus after the latest round of quarterly earnings. Ralph Lauren (NYSE:RL) stock fell 6.9% in response to news of a quarterly loss, driven largely by renewed lockdowns in Europe. The company nonetheless reinstated its dividend. Kohls (NYSE:KSS) stock fell over 11% after a swing back to profit and increased guidance for the full year failed to keep up with expectations that had already generated a 50% rally in the stock this year.

Among the gainers, Virgin Galactic (NYSE:SPCE) jumped 13.5% after confirming that its repeatedly delayed test flight will go ahead on May 22 as planned. The stock is still well down from its February highs, however, after a sharp sell-off caused by the exit of key insiders such as Richard Branson and 'SPAC King' Chamath Palihapitiya. 

Latest comments

STAGFLATION!
The fed is the market maker abd manipulator
The Fed is bluffing support for the stock market .... thats all they can do , bluff. Sure, they can print credit at 120b a month for awhile , but thats not goung to help a stock market bloated on 9 trillion in stim last 15 months!! In fact, cryptos burn off , in two weeks, more than the credit created in a year from QE in losses. Cryptos volitilty cancel Fed credit creation. Fed is quickly running out of assets to attach to to generate credit , real gdp is needed .
Are we turning japanese ? I really think so!!
911 the 2008 great recession and covid guaranteed no less than 25 years to a FULL recovery And better keep fingers crossed nothing else happens in the mean time. All 3 events set generations way back.
 USA will be stuck in a huge handout and welfare system totally unavoidable.
"all right" news are twisted to excellent boost news and bad news are twisted to neutral or even good news these days. Take a year or so and US is f..ed up.
the stimulus hope is back!
aaaah stimulus hopes....I missed it lol lol
"economy overheating" - dumbest concept in the whole financial world right now. This makes it seem like the economy is doing so great that it's actually doing poorly, when in fact it's doing poorly AND the recent 10 trillion dollar inflation by the Fed and Treasury are concurrently causing price levels to rise in all major sectors of the market. As more and more of that counterfeit money makes it into general circulation prices levels will rise further and the CPI will continue to climb (despite of the fact that the CPI is purposely constructed to high price increases as much as possible).
What do you mean by “ Counterfeit money”
 paper fiat currency. In the US our government was delegated the power to "coin money". The clear intent of this power is create coins made out of money (i.e. silver and gold). In the Mint Act of 1792 the Dollar, or Unit, was defined as a weight measure of fine silver. The Eagle was defined as a weight measure of gold in reference (ratio) to the Dollar. This is Constitutional money. Anything else is counterfeit and subject to Section 19 of the aforementioned Act is a felony and punishable by death. Look it up.
Monopoly money, stimmy bux, debt forced on the US payer for MANY future generations (that will NEVER be paid back, due to compounding crises that'll inevitably come up as time goes on), etc. What OP is trying to say is that it's a scam on Americans. The ones that see "free money" are too naïve/ignorant to understand basic accounting concepts.
all the numbers were down or flat except for "prices paid". That shot up again. When will you realise it's stagflation
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