Dow, S&P 500 Once Again Reach New Record Intraday Highs

The Dow has shown a notable move to the upside in morning trading on Wednesday, with the blue-chip index reaching a new record intraday high. The S&P 500 has also edged up to a new record high, while the tech-heavy Nasdaq is extending the drop seen in the previous session.

Currently, the Dow is up 214.67 points or 0.6 percent at 35,479.34 and the S&P 500 is up 10.99 points or 0.3 percent at 4,447.74. Meanwhile, the Nasdaq is down 13.92 points or 0.1 percent at 14,774.17 after seeing initial strength.

The new record highs for the Dow and the S&P 500 come as the Labor Department’s highly anticipated reading on consumer price inflation was not bad as some had feared.

The Labor Department said its consumer price index climbed by 0.5 percent in July after jumping by 0.9 percent in June.

The increase in consumer prices, which came following the biggest jump in thirteen years in the previous month, matched economist estimates.

Compared to the same month a year ago, consumer prices in July were up by 5.4 percent, unchanged from the annual rate of growth seen in June. The pace of growth was expected to dip to 5.3 percent.

Excluding higher food and energy prices, core consumer prices rose by 0.3 percent in July after surging by 0.9 percent in June. Economists had expected core prices to increase by 0.4 percent.

The annual rate of growth in core prices slowed to 4.3 percent in July from 4.5 percent in June, matching economist estimates.

While the pace of core consumer price growth remains well above the Federal Reserve’s 2 percent target, traders are viewing the modest slowdown as a sign the central bank will not be in a hurry to scale back stimulus.

The Fed’s asset purchase program has helped prop up the markets throughout much of the coronavirus pandemic, making traders wary of any signs of potential tapering.

The recent resurgence in coronavirus cases may weigh on the economy, leading the Fed to put off tapering plans and allowing stocks to continue to climb to record highs.

Most of the major sectors are showing only modest moves on the day, although substantial strength has emerged among gold stocks.

Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index has surged up by 2.7 percent after ending the previous session at its lowest closing level in well over a year.

The rebound by gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $13.80 to $1,745.50 an ounce.

Transportation and tobacco stocks are also seeing some strength on the day, while continued weakness among biotechnology stocks is weighing on the Nasdaq.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.

The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index had advanced by 0.8 percent, the French CAC 40 Index is up by 0.5 percent and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries have climbed off their worst levels but continue to see modest weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.4 basis points at 1.356 percent.

Business News