4:11pm: Dow can't quite eke out a win
The Dow closed Monday down 37 points, 0.1%, at 34,464, while the Nasdaq Composite added 207 points, 1.6%, to 13,498 and the S&P 500 jumped 30 points, 0.7%, to 4,400. The small-cap Russell 2000 index 1 point to 1,859.
The Nasdaq managed to end a four-session losing streak even as 10-year Treasury yields reached their highest level in 16 years.
“I think the path of least resistance is the momentum that you’ve seen coming into this week,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. “The 10-year Treasury continues to rise here, and although you did see positive impulse for markets and in particular cyclicals, I think, ultimately, the 10-year Treasury is going to weigh on valuations and put more downward pressure on the markets as the week develops.”
12:00pm: Blue-chips go into reverse but tech holds firm
Blue-chips went into reverse late morning although tech stocks held firm as yields on the US benchmark government bond hit their highest level since 2007.
At midday, the Dow Jones Industrial Average was down 214.15 points, 0.6%, at 34,286.51, the S&P 500 was down 6.76 points, 0.2%, at 4,362.95 but the Nasdaq Composite held in the green, up 50.50 points, 0.4%, at 13,341.28.
A succession of robust US economic data has stamped out hopes that the country’s central bank, which lifted interest rates to a 22-year high over the past year, would start cutting rates soon.
On Monday, the yield on the 10-year benchmark rose 0.09 percentage points to 4.34%, its highest point in 16 years.
Attention has turned to the closely watched Fed conference in Jackson Hole, Wyoming, later in the week, where investors hope for officials to hint at their future policy plans.
9:38am: Nasdaq leads US stocks higher
US stocks started the week on the front foot after a punishing August so far.
Shortly after the opening bell, the Dow Jones Industrial Average was up 43.23 points, 0.1% at 34,543.89, the S&P 500 jumped 20.36 points, 0.5%, to 4,390.07 and the Nasdaq Composite leapt 98.72, 0.7%, to 13,389.50.
Investors are looking ahead to this week’s annual gathering of central bankers at Jackson Hole, Wyoming, with Federal Reserve Chairman Jerome Powell due to speak Friday.
Ahead of two of Wall Street’s leading investment banks took differing views of the direction for US equities.
Morgan Stanley (NYSE:MS)’s Michael Wilson thinks sentiment is likely to weaken further if investors start to “question the sustainability of the economic resiliency.”
But his counterpart at Goldman Sachs (NYSE:GS), David Kostin, says there’s room for investors to further increase exposure if the economy stays on course for a soft landing.
Stocks on the move include Regeneron Pharmaceuticals (NASDAQ:REGN), up 1.0%, after the biotechnology company reported on Friday that a higher dose of its eye disorder drug EYLEA has been approved by the Food & Drug Administration (FDA).
The FDA approved EYLEA HD (aflibercept) Injection 8 mg for patients with wet age-related macular degeneration (wAMD), diabetic macular edema (DME) and diabetic retinopathy (DR).
Two late-stage clinical trials showed EYLEA HD was just as effective as its lower dose 2mg version with fewer injections required.
Palo Alto Networks Inc (NYSE:PANW) jumped 17% after well-received results after the market close Friday.
The unusual timing of the numbers had sparked some nerves ahead of the release, but these prove ill-founded.
WMware Inc. was another stock on the rise, up 5.4%, after the UK Competition & Markets Authority cleared Broadcom Inc's planned acquisition of the company after an in-depth phase 2 investigation.
Broadcom, a California-based semiconductor manufacturer, plans to buy California-based cloud computing company VMware for around $69 billion.
9:10am: Premarket movers
Palo Alto Networks Inc (NYSE:PANW) (Palo Alto Networks Inc (NYSE:PANW)) stock is the week’s early mover, with a strong relief rally following Friday’s oddly timed but not bad earnings release. Today the stock is up 12.28% at US$235.44.
Tesla stock is set to start the week on the front foot, helped by an upgrade by stockbroker Baird, with Elon Musk’s EV pioneer up just over 3% in early deals.
Xpeng Inc (NYSE:XPEV) (Xpeng Inc (NYSE:XPEV)) stock is in recovery mode, helped by an analyst upgrade, following last week’s downbeat earnings report – which on Thursday showed a wider-than-expected net loss for its second quarter. Today, it is up 5.9% in premarket trade, changing hands at US$15.87 per share.
It is looking like a horror show for investors in Amityville-headquartered NAPCO Security Technologies (NAPCO Security Technologies Inc (NASDAQ:NSSC)) as its stock fell 38%, at US$23.73, in Monday’s premarket deals after warning late on Friday that it had identified errors in past financial statements.
Nikola dropped more than 14% in Monday’s early deals, to US$1.68, after the EV firm revealed a US$325 million bond deal that threatens an ‘overhang’ in stock as well as future dilution as debt is swapped for equity.
Earthstone Energy Inc (NYSE:ESTE) stock jumped 8.7% higher, to US$17.65, after news of its premium-priced, US$4.5 billion takeover by US shale peer Permian Resources (NYSE:PR), down 3.49% ahead of the bell at US$12.44.
07:00am: US markets set to rally after downbeat week
US markets are expected to open higher on Monday attempting to recoup some of last week's hefty losses.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.3% higher, while those for the S&P 500 rose 0.4%, and contracts for the Nasdaq 100 futures were up 0.6%.
Goldman Sachs (NYSE:GS) thinks the recent falls in equities will be not last for long.
“Should the US economy continue on its path to a soft landing, we believe the recent decrease in equity length will be short-lived,” the US investment bank said.
“The re-opening of the buyback blackout window will provide a boost to equity demand in coming weeks although a flurry of expected equity issuance this fall may provide a partial offset,” it suggested.
The main focus of the week will be the speech by the Federal Reserve chair Jerome Powell at Jackson Hole although Goldman doesn’t expect this to “carry the same ‘pain’ warning as last year.”
It seems the overall message will still be one of “seeing the job through,” the broker reckons.
The main earnings focus this week will be results from Nvidia, while today earnings are due from video conferencing firm Zoom, two weeks after announcing it would be calling its employees back to the office twice a week.
In pre-market trading, Palo Alto Networks Inc (NYSE:PANW) is up 11% after results after the market close were well received despite worries of the unusual scheduling.