Market Wrap for Wednesday, August 28: Fed Tapering Might Not Be Near
Housing market is getting hit by the increasing interest rate environment threatening economic recovery; investors perceive the data as a positive, as the Fed will be less likely move ahead with tapering and push stock markets higher.
The Dow Jones Industrial Average was up by +48.38 points, or 0.33 percent, closing at 14,824.51 .
S&P 500 rose +4.48 points, or 0.26, percent ending at 1,634.96
NASDAQ Composite edged up by +14.83 points, or +0.41 percent, to 3,593.35
Wednesday's MBA purchasing applications index shows refinancing has slummed by five percent for the week, whereas mortgage applications are at +2 percent for the same week, probably reflecting fears that interest rate will jump higher than it already is. Also, pending home sales index reinforced the weakening housing market; sales of existing homes declined by -1.3 percent for July, undermining expectation of -1 percent.
In Europe: UK FTSE 100 index declined by 0.6 percent on Wednesday ending at 6,404.05. The Stoxx Europe 600 index was down by -0.5 percent closing at 297.39. Uncertainty and anxiety over Syria conflict weighs heavily over global market participants.
Additionally, in Germany consumer sentiment has declined for the first time in eight months, even though the over all economic activity is positive.
The good news came out of U.K. today; Bank of England Governor, Mark Carney announced a decision to ease the liquidity requirements for the banking industry; boosting the financial sector stocks.
Gold closed down by 0.23 percent, closing at $1,417.00.
Silver closed down by 0.37 to close at 24.28.
Crude Oil at WTI was up 0.79 percent to 109.87. Oil supply has increase by three million barrels for the week, according to a report released on Wednesday by EIA, adding to possibility of downward pressure on oil price.
The iShares Barclays 20+Year Treasury Bond ETF (NYSE: TLT) was down by 0.79 points. Treasury yield on raising: 5-year was up by +0.057 points, 10-year was up by +0.061 points, and 30-year was up as well by +0.051 points.
EUR/USD was down by -0.37 percent, GBP/USD was down by -0.10 percent, and USD/JPY is up by +0.38.
PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the USD versus a basket of foreign currencies, was up by 0.41 percent.
Volatility and Value
VIX S&P 500 decreased by 2.33 percent at 16.38
The volume was up; SPDR S&P 500 (NYSE: SPY) increase by 0.35 percent ending at 77,016,007.
Stock Movers Up
BlackBerry (NASDAQ: BBRY) jumped +5.4 percent on a rumor that Lenovo might want to buy the company at $17 per share.
Cirrus Logic (NASDAQ: CRUS) gained +7.7 percent after being upgraded to buy by Feltl's Jeff Schreiner; with a price $20 to $26.
Stock Movers Down
Harvest Natural Resources (NYSE: HNR) declined by -4.1 percent after a negative article was released on Seeking Alpha predicting a downside of 40 to 100 percent because of aggressive accounting policies and luck of revenue.
Dycom Industries (NYSE: DY) fell -8.5 percent after missing on fourth-quarter revenue on Tuesday.