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US stocks close mixed as financial stocks fall despite strong tech gains

Both S&P 500 and the Nasdaq posted record closing highs as the market looks to close August trading with a strong finish

Wall Street traders
By midday the S&P was up 25 points to 4,543; while the Dow Jones Industrial Average climbed 35 points to 35,490

4:05pm: US equities end in mixed session

US stocks closed mixed as financial stocks fell despite strong gains in the tech sector. 

Nevertheless, both S&P 500 and the Nasdaq posted record closing highs as the overall markets look to close August trading with a strong finish. 

On the day, the DJIA dropped 56 points, or 0.16%, to 35,399 and the S&P 500 rose 0.43% to 4,528. The tech-heavy Nasdaq increased 0.90% to 15,265.

12:15pm: The S&P 500 and NASDAQ trend higher breaking old records

Last week’s stock rally continued into Monday with the S&P 500 and NASDAQ entering record territory following the reaffirmation of the Federal Reserve’s dovish stance late last week.

By midday the S&P was up 25 points to 4,543; while the Dow Jones Industrial Average climbed 35 points to 35,490.

The benchmark S&P 500 is on track to record its longest monthly winning streak in more than 24 months, as investors look past rising coronavirus (COVID-19) variant cases and the potential impact on economic recovery.

The NASDAQ surpassed its previous record high to add 128 points and hold at 15,258. The positive start to the new week was facilitated by a broad rise in tech stocks, including: Apple Inc (NASDAQ:AAPL), Microsoft Corp, Amazon.com, Google-owner Alphabet Inc (NASDAQ:GOOG) and Nvidia.  

Elsewhere, pending home sales registered another consecutive monthly decline in July. Surging home prices are believed to be part of the reason for the retraction.

“This was a tricky call, because pending sales in recent months have run above the level implied by the mortgage applications numbers,” Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote in a midday note. “We’re guessing that increased inventory is allowing previously-frustrated buyers to find homes, but it’s also possible that rising numbers of cash buyers also are lifting sales.

 Shepherdson also noted: “The dip in pending sales in June and July, has brought the numbers more closely into line with mortgage demand, which appears to have rebounded strongly this month. The bottom line here is that demand for existing homes has dropped appreciably from last winter’s highs, but it probably has now stabilized.”

10.15am: Slow and mixed start

US stocks were mixed in early trade on Monday, with the blue-chips lower but the broader market still supported by Friday's upbeat speech from Federal Reserve chairman Jerome Powell.

After about 45 minutes of trading, the Dow Jones Industrial Average was down 68 points, or 0.2% at 35,394.

But the S&P 500 index added 0.3%, and the tech-heavy Nasdaq Composite Index jumped 0.7%, with both indices having hit new all-time closing highs on Friday.

Jerome Powell's speech, delivered virtually at the US central bank's Jackson Hole Symposium on Friday highlighted why he is still confident that this year’s jump in inflation should prove temporary. 

Investors had been worried that prolonged inflationary pressures could cause the Fed to taper its easy money policy sooner than expected and accelerate interest rate rises

Marshall Gittler, head of Investment Research at BDSwiss Holding Ltd. commented: "I think the speech pretty much confirmed what the market had expected."

6.45am: Pause for breath

US stocks look set to pause at the start of a new week after the S&P 500 index and the Nasdaq Composite both reached record closes on Friday following an upbeat speech from Federal Reserve chairman Jerome Powell.

Futures for the blue-chip Dow Jones Industrial Average, the broader S&P 500, and the tech-heavy Nasdaq-100 all ticked up by just 0.1% on Monday.

Friday's comments from the Fed boss, delivered virtually at the US central bank's Jackson Hole Symposium, underpinned investor optimism, with Powell highlighting why he is still confident that this year’s inflation jump should prove temporary fueled as it is by disrupted supply chains, temporary shortages and a rebound in travel.

Investors had been worried that prolonged inflationary pressures could cause the Fed to taper its easy money policy sooner than expected and accelerate interest rate rises.

Elsewhere, oil prices eased back slightly on Monday having jumped 11.5% last week ahead of Hurricane Ida’s landfall in Louisiana on Sunday. Ahead of the storm, offshore producers had closed wells that pump around 91% of the US Gulf of Mexico’s output.

On the corporate front, Zoom Video Communications - a big beneficiary of the working from home moves caused by the coronavirus (COVID-19) pandemic - is set to report quarterly earnings after the market close on Monday.

Five things to watch on Monday:

Hurricane Ida made landfall on Sunday and battered New Orleans and much of southeast Louisiana, knocking out power, downing trees and causing havoc as the region’s most severe storm since Hurricane Katrina exactly 16 years earlier.

Baxter International (NYSE:BAX) Inc. is in advanced talks to buy medical equipment maker Hill-Rom Holdings Inc. for around $10 billion, the Wall Street Journal exclusively reported citing people familiar with the matter, noting that a deal that values Hill-Rom at around $150 a share could be reached by midweek assuming the talks don’t fall apart.

Dozens of United Airlines Holdings Inc. jets like the one that lost an engine cover over Colorado in February aren’t expected to fly until early next year, as federal regulators weigh additional safeguards, the Wall Street Journal exclusively reported citing people briefed on the matter.

Shares of Support.com jumped more than 30% pre-market as some traders on Reddit’s WallStreetBets forum speculated about a potential short-squeeze in the stock.

Some US fast-food restaurants are closing indoor seating areas or limiting hours of operation because of the spread of the Delta variant of COVID-19, according to franchisees, Reuters reported.

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