After a brief dip in afternoon trading, U.S. equities were able to finish higher following two days of solid declines.
Treasury yields added to a recent drop and the U.S. dollar was little changed even with a better-than-expected revision to Q1 GDP growth coming up against another soft read on housing.
Crude oil prices tumbled and gold was higher.
The Dow Jones Industrial Average rose 43 points (0.2%) to 25,170
The S&P 500 Index added 6 points (0.2%) to 2,789
The Nasdaq Composite increased 20 points (0.3%) to 7,568
In light-to-moderate volume, 700 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq
WTI crude oil decreased $2.22 to $56.59 per barrel and wholesale gasoline was down $0.07 at $1.85 per gallon
The Bloomberg gold spot price rose $8.22 to $1,288.00 per ounce
The Dollar Index— a comparison of the U.S. dollar to six major world currencies—was flat at 98.14
Q1 GDP growth revised lower by smaller rate than expected, jobless claims tick higher
The second look (of three) at Q1 Gross Domestic Product, the broadest measure of economic output, showed a quarter-over-quarter annualized rate of growth of 3.1%, from the first release’s 3.2% gain and versus the Bloomberg forecast of an adjustment to a 3.0% expansion. Q4 GDP grew by an unrevised 2.2% rate. Personal consumption was revised to a 1.3% increase, from the first estimate of a 1.2% gain, where it was expected to remain, and compared to the unrevised 2.5% rise seen in Q4.
On inflation, the GDP Price Index was revised to a 0.8% increase, from the initially-reported 0.9% gain, and compared to estimates to be unrevised, while the core PCE Index, which excludes food and energy, was adjusted to a 1.0% rise, from the previous estimate of a 1.3% increase, and compared to forecasts to be unadjusted.
Weekly initial jobless claims rose by 3,000 to 215,000, compared estimates of a rise to 214,000, with the prior week’s figure being revised higher by 1,000 to 212,000. The four-week moving average declined by 3,750 to 216,750, while continuing claims fell by 26,000 to 1,657,000, south of estimates of 1,662,000.
Treasuries were slightly higher, as the yield on the 2-year note was unchanged at 2.08%, while the yield on the 10-year note ticked 1 basis point lower to 2.22% and the 30-year bond rate lost 3 bps 2.65%.
The week’s economic calendar will culminate tomorrow with personal income and spending, with income expected to have risen 0.2% m/m for April and spending to have ticked 0.1% higher m/m, as well as the final May University of Michigan Consumer Sentiment Index, forecasted to be revised to 101.5, down from the 102.4 in the preliminary report, but above the 97.2 posted in April. The Chicago Purchasing Managers Index is also expected, with economists projecting a reading of 53.7 for May, up from the 52.6 posted in April.
Europe mostly higher, Asia mixed amid trade concerns and ahead of data
European equities finished mostly higher, rebounding from yesterday’s broad-based drop that came amid heightened U.S.-China trade war concerns and recent global economic growth worries and ensuing drop in bond yields. Trade worries continued to be in focus and the markets grappled with increased political uncertainty in the region following the weekend’s European parliamentary elections. The euro and the British pound were lower versus the U.S. dollar, while bond yields in the region were mostly higher.
Stocks in Asia finished mixed, with the global markets remaining skittish amid the escalated U.S.-China trade tensions and diverging economic data that have fostered a drop in bond yields and the recent inversion of the yield curve in the U.S, which has caused growth concerns to flare up.
Japanese equities declined, with losses likely being limited by the yen giving back some of a recent gain.
Mainland Chinese securities and those traded in Hong Kong decreased amid some likely cautious trading ahead of the nation’s manufacturing and services sector reads tonight. Australian listings fell amid the global uneasiness and as the country’s building approvals unexpectedly dropped in April following March’s solid decline.
Stocks in South Korea gained ground, with some strength in the technology sector, and markets in India also advanced amid some lingering optimism from the recent decisive victory for Prime Minister Narendra Modi, and ahead of tomorrow’s GDP report.