Broader Averages Closed Higher After Tech Stocks Rallied Second Consecutive Day

Barry Adams
23 Aug, 2023
New York City

Market averages rebounded on Wall Street after a rally in tech stocks lifted a narrow list of stocks. 

Market averages staged a strong reversal on Wednesday ahead of the widely anticipated earnings from the chipmaker Nvidia Corp.  

Nvidia Corp is scheduled to release its earnings after the close and investors are looking for clues about the AI-fueled growth for the company's chipsets. 

Treasury yields also edged lower from 16-year highs after the yield on the 10-year Treasury bonds eased to 4.2% from the high of 4.33% two days ago.    

The bond yields edged partly lower after a private survey conducted by the S&P Global showed that the Purchasing Managers' Index eased to 50.4 in August, a decline for the third month in a row. 

Manufacturing sector contraction deepened in the month and slower service sector growth accompanied by a decline in total new orders for the first time in six months.   

 

New Home Sales Jumped to 17-month High 

New home sales in July rose to a seasonally adjusted annual rate of 714,000, the Commerce Department reported Wednesday. 

New home sales rose 4.4% from the downwardly revised level in June and 31.5% from a year earlier.

Home builders are sold fewer pre-construction homes as builders cleared inventories.   

Homes available for sale totaled 437,000, about 7 months of inventories and new homes sold prior to construction declined by 20,000 to 93,000 and to the low of the year.  

The median price of a new home sold declined to $436,700 and the average sales price was $513,000, compared to $478,200 and $564,900 respectively a year earlier.

 

U.S. Indexes & Yields 

The S&P 500 index traded up 1.1% to 4,435.87 and the Nasdaq Composite gained 1.7% to 13,736.19.  

The yield on 2-year Treasury notes increased to 5.03%, 10-year Treasury notes inched higher to 4.32% and 30-year Treasury bonds edged up to 4.41%. 

West Texas Intermediate crude oil eased to a one-month low and Brent crude oil price fell to the level last seen on August 3. 

Crude oil increased $0.42 to $79.71 a barrel and natural gas prices decreased 5 cents to $2.54 a thermal unit. 

 

U.S. Stock Movers 

Foot Locker Inc plunged 29.7% to $16.71 after the specialty retailer reported sales declined almost 10% from a year ago and the company also suspended its quarterly dividend. 

Peloton Interactive Inc dropped 23.3% to $5.38 after the fitness equipment company reported wider-than-expected and the company forecasted weak sales outlook in its fiscal first quarter. 

The company's sales guidance between $580 million and $600 million fell short of market expectations of at least $620 million. 

The company also said that the cost of the recent recall also exceeded its estimates and expects additional expenses in the future. 

Kohl's Corp rose 4.3% to $26.85 after the department store retailer reported better-than-expected quarterly results.

Nike Inc declined 2.7% to &98.76 and the athletic shoemaker extended losses to the 10th session in a row after Foot Locker reported weaker-than-expected sales.  

Analog Devices, Inc rose 0.6% to $177,75 after the company reported fiscal third quarter results that evoked mixed reactions from investors. 

Stock recovered from the slump of 5% in pre-market trading after the company forecasted fiscal fourth quarter revenues of $27 billion and adjusted earnings per share of $2.0.