4:11pm: 10-year Treasury yields jump
The Dow closed Tuesday down 174 points, 0.5%, at 31,148, the Nasdaq Composite slipped 86 points, 0.7%, to 11,545 and the S&P 500 shed 16 points, 0.4%, to close at 3,909. The indices swung positive around midday, but the rally was short lived.
Meanwhile, the US 10-year Treasury yield increased 0.151 percentage points to 3.342%, including as high as 3.353%, as investors sold bonds.
“Bulls hoping for a rebound will be doing so during a shortened Labor Day week that historically has paralleled September and its track record of underperformance," said Chris Larkin, managing director of trading for E*Trade, as reported by CNBC. "Losses have been slightly less frequent over the past three decades, but volatility has been higher."
12.05pm: US indices stick to green
The major US indices remained in green territory midday, as investors reviewed the modest improvement in the August Institute for Supply Management (ISM) Services purchasing managers’ index (PMI).
At midday, the Dow Jones Industrial Average was up 0.1% to 31,365, the S&P 500 was up by 0.3% at 3,934, while the Nasdaq Composite was up by 0.1% at 11,642.
Joshua Mahony, senior market analyst at online trading platform IG, noted business activity in the US service sector expanded at a somewhat stronger pace in August than it had in July, with the ISM Services PMI rising to 56.9 from 56.7.
“A belated start to the week for US markets has brought fresh losses at the open, with growth names driving underperformance for the Nasdaq,” Mahony said in a statement.
“Today’s ISM services PMI reading brought plenty of grounds for optimism, with a surprise rise accompanied by a declining price growth, rising employment growth, and particular strength for new orders. With 83% of Friday’s 315,000 payrolls reading coming from the private services sector (263,000), there is no doubt that rising prices are yet to stifle employment in the critical segment of the economy. ”
At midday, the major movers included pest control company Rollins, up by 6.25% on news that Metropolitan Life Insurance Co NY cut its holdings in its shares of the company. Enphase Energy was up by 5.7% and Illumina rose by 4.7%.
On the downside, the Nasdaq saw Pinduoduo fall by 7%, Octa shed 4.7% and Netflix move down by 3.5%.
10.45am: Proactive North America headlines:
Netflix will not allow cryptocurrency-related advertisements, sources say
Nickel North Exploration launching field exploration work at Hawk Ridge nickel-copper-cobalt-PGE sulfide project
NEO Battery Materials offers corporate update on coin full cell production and NBMSiDE development
Eskay Mining’s consolidated Eskay VMS project is demonstrating district-scale potential, says Noble Capital analysts
FSD Pharma wins FDA and Health Canada approval for IND for Phase 2 Trial of FSD201 for treating inflammatory disorder
Arrow Exploration receives ‘Buy’ rating and C$0.54 price target from Canaccord Genuity (TSX:CF, LSE:CF) in initial coverage
NioCorp Development says its demonstration plant in Quebec begins testing process improvements and rare earth recovery operations
ACME Lithium acquires more claims to expand its Manitoba lithium projects in the Winnipeg River pegmatite region
TNR Gold issues update on its NSR royalty at McEwen Mining-owned Los Azules copper project in Argentina
Fireweed Metals appoints Peter Hairsine to board of directors
Gratomic unveils latest findings from third trenching program at Capim Grosso project ahead of drilling
Appia Rare Earths & Uranium brings on Dr Irvine Annesley as vice president of exploration
Playgon Games (TSX-V:DEAL, OTCQB:PLGNF) reveals third straight monthly record player betting turnover in August 2022
Fobi AI (TSX-V:FOBI, OTCQB:FOBIF) delivers Checkpoint digital ticketing system to Aaron Pritchett’s Big Wheel Charity Golf Classic in BC
Naturally Splendid says Vegan Supply to distribute Plantein products through its foodservice network, e-commerce platform and in-store
Japan Gold (TSX-V:JG) says Barrick Gold advances six projects to second evaluation phase; three project areas to initial evaluation
PlantX Life reports August revenue jump driven by its cold juice brand Little West and successful live events
World Copper and Electric Royalties close royalty sale and option package on Zonia copper oxide project
BioVaxys Technology announces completed synthesis of its pan-sarbecovirus vaccine candidate and launch of in vivo animal stud
New Age Metals (TSX-V:NAM, OTCQB:NMTLF) announces start of maiden drill program at Lithium One project in Manitoba
Psyched Wellness inks key supply agreements ahead of anticipated launch of its first Amanita Muscaria mushroom-derived product Calm
Ultra Lithium kicks off exploration activities at the Forgan Lake lithium property in Ontario
Generation Hemp (OTCQB:GENH) launches Gas Monkey Spill-Jack hemp product line
BioHarvest Sciences wins The Business Intelligence Group’s 2022 Sustainability Leadership Award
TRACON Pharmaceuticals strikes $35M debt financing facility with Runway Growth Capital
Auxico Resources gets new CEO in rare earths specialist Frederick Kozak
American Battery Technology Company (OTCQB:ABML) appoints Bret Meich as general counsel
Soma Gold Corp ends ‘successful’ 2Q with higher gold sales and production
Evergold appoints co-founder Charlie Greig as chief exploration officer and director
Group Eleven Resources discovers high-grade massive sulphides as part of an initial step-out drill program at its Ballywire zinc prospect
enCore Energy announces completion and installation of baseline wells at Rosita Extension Project
CULT Food Science Corp (CSE:CULT, OTCQB:CULTF) says portfolio company Umami Meats unveils world’s first cultivated fish balls in a noodle dish
Plurilock says its Integra Networks subsidiary secures up to C$1.5M line of credit
Red Pine Exploration reports new results from its 2022 exploration program, which is continuing to expand the footprint of mineralization
9.35am: Stocks rally after long weekend
US stocks rose at the open following the Labor Day long weekend, bringing good news for investors after three weeks of declines across the three major indexes.
Just after the open, the Dow Jones Industrial Average had added 114 points or 0.4% at 31,432 points.
The S&P 500 had gained 12 points or 0.3% at 3,937 points, while the Nasdaq Composite was up 47 points or 0.4% at 11,678 points.
Embattled meme stock Bed Bath & Beyond continued to tumble, down about 16% at the open, following the death of the company's CFO Gustavo Arnal over the weekend. This comes after the home retailer last week detailed plans to sell shares, cut its workforce by 20%, and close 150 stores.
In other meme stock news’ AMC Entertainment Holdings (NYSE:AMC) Inc’s APE had rallied about 5% after six days of losses, out of step with AMC stock itself which had fallen about 3%.
6:30am: Oil in focus
US stocks were expected to open higher on Tuesday on the return after the long Labor Day weekend, rallying following hefty falls last week with the focus falling on oil prices in the wake of OPEC+’s decision to cut crude production.
Futures for the Dow Jones Industrial Average were trading 0.8% higher pre-market, while those for the broader S&P 500 index were also up 0.8%, and futures for the tech-laden Nasdaq-100 were 0.9% higher.
A key development has been the decision by OPEC and its allies cut production by 100,000 barrels per day as the cartel seeks to stabilize oil prices after the longest price decline since the beginning of the pandemic, noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank
“In reality, OPEC is not happy to see oil prices ease with the recession talk, and cutting supply suddenly dwarfs the demand side of the problem and should, in theory, reverse the trend back to bullish,” she said.
But so far, gains in crude oil prices appear limited, Ozkardeskaya added, noting that if the US reaches a nuclear deal with Iran, that will bring 4 million extra barrels per day into the equation and make OPEC+’s 100,000 cut look ridiculous.
“For now, the barrel of US crude couldn’t clear the $90 resistance, as no one really knows what could happen in the complex politics of the oil market, and the recession worries weigh on the demand outlook,” concluded Ozkardeskaya.
WTI crude futures were down 0.3% at $86.59 a barrel while Brent crude futures were up 0.01% at $93.03.
In the meanwhile, data from last Friday confirmed that US labor markets remain strong despite the Federal Reserve's series of interest rate hikes. The highly anticipated August non-farm payrolls report showed that the nation added 315,000 jobs in the month, slightly above the consensus analyst expectation of 300,000 but lower than the previous month.
The data left investors wondering whether the labor market in the world’s biggest economy is about to turn and what the implications will be for further Fed rate hikes.
Contact the author at jon.hopkins@proactiveinvestors.com