The three major US stock indices continued to record declines for the fifth consecutive session at the opening of trading today, Thursday, August 21, pressured by the technology sector. Five of the Magnificent 7 stocks, with the exception of Alphabet and Nvidia, are trading in the red, as investors await the Jackson Hole meeting and Jerome Powell’s remarks on Friday.
The S&P 500 index sectors are mostly trading in the red, with the technology sector losing 0.18%, the healthcare sector declining 0.08%, the consumer discretionary sector declining 0.60%, the financial sector declining 0.45%, the industrial sector declining 0.11%, while the utilities sector rose 0.01% and the materials sector rising 0.02%.
In terms of economic data, the Philadelphia-area manufacturing activity index, according to the Manufacturing Business Expectations Survey, declined in August, falling to -3 points after rising to 15.9 in July. The new orders index fell by 20 points, marking the first negative reading since April, while the employment index fell by 4 points.
Meanwhile, the US Department of Labor announced that initial claims for state unemployment benefits rose last week, ending August 16, to 224,000, an increase of 11,000 claims, exceeding expectations.
The ISM Purchasing Managers’ Index (PMI) for the services and manufacturing sectors, released just moments ago, came in better than market expectations. The manufacturing index rose to 53.3, its highest level in 39 months, compared to 49.8 in July, exceeding expectations. The services index rose to 55.4, its lowest level in two months, compared to 55.7 in July (expectations: 54.2). In terms of stock movements, retailer Walmart shares fell more than 2% in early trading after the company reported lower-than-expected second-quarter earnings and raised its full-year sales and earnings forecasts. The company reported second-quarter revenue of $177.4 billion and earnings of $0.68 per share, compared to Wall Street’s $0.74 forecast.
By contrast, Boeing shares rose more than 1% after the company announced it was in talks to sell up to 500 aircraft to China.
Johnson & Johnson announced it will invest $2 billion in North Carolina as part of a plan to boost domestic manufacturing in the United States.
Attention is now focused on Federal Reserve Governor Jerome Powell’s remarks on Friday at the Jackson Hole Symposium in Wyoming, which begins today. Markets are awaiting any indication from Powell regarding the future of monetary policy and the interest rate cuts that markets are pricing in twice this year: in September by more than 85% and in December by more than 70%. The Dow Jones Industrial Average (Dow) is trading down by about (16) points at 44.930, with losses of about 0.04%, while the S&P 500 Index (S&P500) is recording losses of 15 points at 6.395, with a decline of about 0.24%, and the Nasdaq Index (Nasdaq) is declining by (142 points) at 21.72, recording losses of about 0.66%, leading the declines after pressure from the technology sector with concerns about artificial intelligence.