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US stocks were steady in the trade as reports on the US gross domestic product came out surpassing expectations was supposed to bolster the index but was pulled back by lower earnings and Fed decision to continue to pare asset purchases.
The Dow Jones Industrial Average shed 0.19% or 31.75 pips to 16,880.36 following a 71 pip rise earlier in the trade. Coca-Cola paced the losses for the blue-chip shares with 19 of the gauge’s 30 components declining. The S&P 500 was little changed by adding a mere 0.01% or 0.12 pips to 1970.07. Among its 10 industry groups, the consumer discretionary led the pack while utilities held it back. The Nasdaq advanced by 0.5% or 20.20 pips to 4,462.90.
The fear gauge or the CBOE Volatility Index increased by 0.8% to 13.40. The trend showed that for every two stocks climbing, three fell. The New York Stock Exchange saw 680 million shares exchange hands today while composite volumes went beyond 3.4 billion.
Twitter Inc. surged by 20% after it reported better-than-expected earnings and was bolstered by World Cup demands that pushed the social media giant to double its company’s revenue. Public Service Enterprise Group Inc. led the decline among utilities by losing 1.7% on its worse-than-expected earnings report. Genworth Financial Inc. plummeted by 14% following the news that its insurer was reviewing the truth behind the setting aside of money for claims. Meanwhile, biotechnology shares were winners in the trade as Amgen Inc. and Regeneron Pharmaceuticals led the sector to gains.
Chief investment officer at ClariVest Asset Management LLC, Stacey Nutt commented the GDP print released this morning had provided the market some “pause” to show how “hawkish” the Fed can get. Nutt adds in an interview with Bloomberg that “now it seems like they were not as hawkish as feared.”
Reports showed that the gross domestic product increased by as much as 4% in an annual pace for the second quarter according to the Commerce Department. This means that it is certain that the Fed’s perspective that it was transitory for a first-quarter contraction. Consumers are now more confident with the improving and increasing share prices for the labor market boosting wealth.
