Stocks end session lower but still post winning August

Selina Johansson

Stocks dipped on Tuesday, but the major indexes still closed out August trading with another monthly gain. 

The S&P 500 was slightly lower during the session, pulling back after the Conference Board’s closely watched monthly report on consumer confidence fell more than expected amid the Delta variant’s spread. Both the S&P 500 and the Nasdaq had set fresh record intraday and closing highs during Monday’s trading day, powered higher by a jump in heavily weighted Big Tech stocks. 

The S&P 500 posted a seventh straight monthly advance in August, logging an almost 3% monthly gain and bringing its year-to-date rise to more than 20%. The Nasdaq outperformed with a gain of about 4% in August as traders piled back into growth and technology stocks. Meanwhile, the Dow — which is heavy in cyclical stocks with earnings tied to the economic recovery — underperformed, gaining just over 1% as concerns over the Delta variant surged in recent weeks.

Sector leadership was split between cyclical and growth areas of the markets in August. The financials sector was the biggest leader in August, gaining 5% on the month. This was followed by the communication services and utilities sectors. However, the energy sector was the biggest laggard during the month, and was the only S&P 500 sector to dip in August. 

Even given the S&P 500’s march to all-time highs, many strategists have penciled in further gains. 

BMO Capital Markets became the latest firm to raise its year-end price target on the S&P 500 on Monday. The company’s chief investment strategist Brian Belski wrote in a new note that he now expects the index to end the year at 4,800 instead of 4,500. He cited the “blistering rate” of corporate earnings beats in the second-quarter, with the strengthening economic backdrop helping also drive profit growth at many companies. 

The current policy environment has also been conducive to further gains in equities, other strategists have noted, given the Federal Reserve’s still-accommodative policy tilt and the prospects of further government spending with the infrastructure and budget reconciliation bills being discussed in Congress.

The Fed’s policy trajectory has been especially closely watched, as traders brace for the gradual easing of crisis-era supports like the central bank’s $120 billion per-month asset purchase program. Still, key central bank officials including Fed Chair Jerome Powell have signaled they are waiting to monitor the incoming data and Delta variant’s impact on the economy before charging ahead with a policy move.

“We do think that tapering, in general, will be a non-event, most likely because first, the market has had time to react throughout this year,” James Liu, Clearnomics founder and CEO, told Yahoo Finance. “The Fed has done a great job telegraphing all this.”

“Whether it’s September or November for the announcement of taper will really depend on the jobs report coming up and some more economic data,” he added. “But regardless, the market seems to expect it at this point. This is very different from 2013, when the market had to adjust very abruptly to taper.”

4:03 p.m. ET: Stocks close out August with 2.9% monthly gain

Here’s where the major indexes closed out trading for the day and month:

  • S&P 500 (^GSPC): -6.19 (-0.14%) to 4,522.6

  • Dow (^DJI): -40.56 (-0.11%) to 35,359.28

  • Nasdaq (^IXIC): -6.65 (-0.04%) to 15,259.24

2:45 p.m. ET: ‘There are clearly downside risks if we can’t get coronavirus back under control’: Strategist

Many strategists on Wall Street have assumed an upbeat view for the end of the year, forecasting more gains on the heels of a recovering economy. 

However, the trajectory of new coronavirus infections is still one of the primary points of concern still weighing on the outlook. 

“There’s some concern for consumers about the end to transfer payments and the coming end to eviction and foreclosure moratoriums. So I think there’s some shaky confidence here,” Rob Haworth, Senior Investment Strategist at U.S. Bank Wealth Management, told Yahoo Finance. “If we can get through the back-to-school, get through this current wave in coronavirus, get hiring back up again, we should stabilize and we could have a pretty positive outlook to the end of the year. That said, there are clearly downside risks if we can’t get coronavirus back under control and get the economy more reopen.” 

12:20 p.m. ET: ‘It’s a confusing market right now’: Strategist

U.S. stocks have drifted near all-time highs so far this year, posting double-digit gains with months to go in 2021. An improving economic backdrop has helped lift risk assets, but left Treasury bond yields still in the doldrums, however. 

“I think it’s a confusing market right now,” ASYMmetric ETFs Founder & CEO Darren Schuringa told Yahoo Finance. “You have the equity markets reaching all time highs — the S&P 500 will close this month, its seventh straight consecutive month of gains — and yet you have bond yields that just cannot rally from the bottom. In a healthy economy where inflation is real and sustainable, your bond yields should be coming up, and they’re just not moving. And that makes for a confusing market for investors.” 

“Where we’re headed, then, is probably a lot of questions — if the markets are going to continue to rally, we have to have a handoff from the Fed with their stimulus and their quantitative easing to the real economy,” Schuringa added. “And I think that’s where investors are on the sidelines still. They’re looking at it and saying, well I’m not so sure that the economy is as strong as the headline numbers, the inflation numbers, are showing right now, since we’re coming out of a recession. I think there’s a lot of wait and see right now from market participants.” 

10:08 a.m. ET: Consumer confidence slid to the lowest level since February in August 

The Conference Board’s consumer confidence index disappointed against already lowered expectations in August, with the latest surge in the coronavirus stoking more concerns among consumers. 

The firm’s headline index fell to 113.8 in August, missing expectations for 123.0, according to Bloomberg data. That was down from 125.1 in July, which was also downwardly revised from the 129.1 previously reported.

Meanwhile, a subindex tracking consumers’ expectations for the future slid to 91.4 in August from 103.8 in July. Consumers’ assessments of present situations also deteriorated during the month. 

“Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a press statement.Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb.”

“While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead,” Franco added. 

9:33 a.m. ET: Stocks open slightly lower 

Here’s where markets were trading just after the opening bell: 

  • S&P 500 (^GSPC): -3.86 (-0.09%) to 4,524.93

  • Dow (^DJI): -34.25 (-0.1%) to 35,365.59

  • Nasdaq (^IXIC): -23.48 (-0.15%) to 15,241.76

  • Crude (CL=F): -$0.59 (-0.85%) to $68.62 a barrel

  • Gold (GC=F): -$4.10 (-0.23%) to $1,808.10 per ounce

  • 10-year Treasury (^TNX): +0.6 bps to yield 1.29%

9:00 a.m. ET: U.S. home prices increased by the most in three decades in June

U.S. home prices surged by the most in 30 years at the beginning of this summer as tight inventory levels and elevated demand combined to drag on affordability.

The S&P CoreLogic Case-Shiller national home price index jumped 18.6% in June over last year, accelerating from a 16.8% rise in May. This also marked a 13th straight month of accelerating price increases.

The firm’s 20-city composite index, which tracks home price changes across 20 major metropolitan areas, grew 19.08% in June compared to last year, also accelerating from May’s 17.14% rise. Consensus economists were looking for this metric to rise by 18.6%, according to Bloomberg data. 

7:15 a.m. ET Tuesday: Stock futures drift sideways

Here’s where markets were trading Tuesday morning:

  • S&P 500 futures (ES=F): +0.00 points, or unchanged at 4,525.25

  • Dow futures (YM=F): +9 points (+0.03%) to 35,361.00

  • Nasdaq futures (NQ=F): -6 points (-0.04%) to 15,591.50

  • Crude (CL=F): -$0.59 (-0.85%) to $68.62 a barrel

  • Gold (GC=F): +$2.90 (+0.16%) to $1,815.10 per ounce

  • 10-year Treasury (^TNX): +0.8 bps to yield 1.292%

6:06 p.m. ET Monday: Stock futures rise

Here were the main moves as the overnight session kicked off Monday evening: 

  • S&P 500 futures (ES=F): +3.75 points (+0.08%) at 4,529.00

  • Dow futures (YM=F): +31 points (+0.09%) to 35,383.00

  • Nasdaq futures (NQ=F): +6.5 points (+0.04%) to 15,604.00

NEW YORK, NEW YORK – AUGUST 10: People walk by the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Next Post

WhatsApp Content Marketing Strategies - Social Media Techniques Report Launched

FitPreneurShip, an online training center for modern entrepreneurs, has launched a new report analyzing the usefulness of WhatsApp as a marketing tool. New York, United States – September 18, 2021 / / — As social media marketing approaches gain more attention across the business world, the new report looks into […]