S&P lower; Dow Jones higher; Nasdaq Composite barely changed
Oracle tumbles as second quarter earnings outlook disappoints
Nvidia sparkles after price target upgrade
Retail sales dip raises concerns over consumer spending growth
After a hesitant start, stocks finished the weak on a firm note, with both the Dow and the S&P closing at new highs.
The Dow Jones 30-share jumped 65 points to close at 22,268 and the broader-based S&P 500 climbed 4.6 to 2,500.2.
Graphics chip maker Nvidia Corp (NASDAQ:NVDA) was wanted, rising 6.3% to US$180 on the back of a price target rise by Evercore ISI to US$250 from US$180.
There was mixed news from the manufacturing sector, as total industrial activity plunged 0.9% percent in August, versus expectations of a 0.1% decline.
According to the central bank, Hurricane Harvey accounted for three-quarters of a percentage point) of the decline.
“The headline figure would have declined 0.1 to 0.2 percent absent the hurricane, but this decline can be attributed to the 5.5% drop in utility production, which was driven by unseasonably mild temperatures, primarily along the East Coast,” notes Daiwa Securities.
In Canada, the S&P/TSX Composite closed marginally higher (+0.3) at 15,173.
Mid-session: Positive trend emerges
All of the major indexes moved into positive territory after an indecisive start.
The Dow Jones was up 45 at 22,249 while the S&P 500 was up a couple of points at 2,497.
Cancer treatment specialist Mirati Therapeutics Inc (NASDAQ:MRTX) was comfortably the top performer, more than doubling its stock price, after it said positive preliminary data from two ongoing clinical trials of sitravatinib in non-small cell lung cancer (NSCLC) would be presented at the IASLC 2017 Chicago Multidisciplinary Symposium in Thoracic Oncology today.
Open: Stocks seek direction
US stocks opened mixed, with the S&P lower and the Dow Jones heading for higher ground, shrugging off concerns about North Korea's latest missile test.
The S&P 500 was down a couple of points at 2,494 while the Dow Jones 30-share was up 19 at 22,222.
North Korea fired a missile over Japan for the second times in under a month but while this sent the Japanese yen tumbling, US investors were sanguine.
“The market reaction to the latest launch would suggest investors are getting a little fatigued with North Korean threats, but this could easily change if there is any escalation,” suggested Jasper Lawler at spread betting firm LCG.
Investors also seemed unperturbed by the fall in retail sales in August.
“Disappointing retail sales growth suggests 3Q consumer spending growth will slow markedly from 2Q's 3.3% rate; however, we still think other components can provide offsetting support within the GDP report,” said James Knightley, the chief international economist at ING.
“Retail sales numbers from the US are pretty disappointing. In August they fell 0.2% MoM versus expectations of a 0.1% rise while July’s growth rate was revised down from +0.6% to +0.3% MoM. The “control group”, which excludes volatile items like gasoline stations sales, food, auto and building material sales fell 0.2% MoM versus predictions of a 0.2% gain. This is significant because it feeds into the consumer spending numbers for GDP and marks quite a slowdown from the3.3% annualised pace of growth seen in 2Q,” Knightley added.
In early deals, software leviathan Oracle Corporation (LON:ORCL) was the biggest faller on the NYSE, falling 6% to US$49.61 after analysts reacted to disappointing second quarter earnings guidance.
Preview
Airlines were expected to be in focus in early trading after JP Morgan issued a note on the sector.
American Airlines Group Inc (NASDAQ:AAL) was off 2.4% and United Continental Holdings Inc (NYSE:UAL) was down 2.6% in pre-market trading after getting downgraded by the investment bank.
The former saw its price target slashed to US$53 from US$61 and the latter from US$84 to US$68.
Spirit Airlines Incorporated (NASDAQ:SAVE), down 3.5%, also lost altitude as JP Morgan cut the price target from US$45 to US$37 but JPM gave a lift to Southwest Airlines Co (NYSE:LUV), up 1.2%, upgrading the stock.
Retailers were also expected to come under a bit of pressure after retail sales figures for August fell 0.2%, thanks to a 1.6% decline in sales at car dealers; strip these out and retail sales rose 0.2%.
Pundits put the drop in vehicle sales to higher gasoline prices as markets reacted to Hurricane Harvey.
"Motor vehicle and parts sales tumbled 1.6% in August, but replacement of hurricane-damaged vehicles in coming months will push up sales, and possibly prices, of both used and new vehicles," predicted Berenberg Capital Markets.
"The net impact of hurricanes on broader retail sales is not obvious. Preparation for the hurricane boosts retail sales as households stock up on groceries, housing products and supplies, then sales stall during the storm and re-accelerate after as households repair, replace and rebuild.
"Excluding the clear hurricane effects, the rest of the August retail sales data was subpar. Control retail sales (excludes sales at food services and drinking places, gasoline stations, building materials and auto stores) which factor directly into GDP fell 0.2% m/m in August, after a strong 0.6% gain in the prior month and are running just 1.3% (annualized) above the Q2 pace," the German bank added.
Teekay Tankers Ltd's stock rose in screen-based trading after the company authorized a US$45mln stock buyback program.
The US$226mln-valued company'sstock rose 3.5% on the news.
Opening call
Spread betting quotes indicated the S&P 500 would open at around 2,491.7, down around four points.