Wall St. ends mixed after surprise rebound in August US retail sales

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Wall St. ends mixed after surprise rebound in August US retail sales

A slew of key indices of Wall St. had edged lower on Thursday as a surprise rise in US retail sales last month alongside a marginal rise in weekly initial jobless claims data, had pushed up the bets for an earlier-than-anticipated tapering of US Fed’s monthly $120 billion bond repurchase program.

On top of that, following release of August retail sales data, US Treasury bond yields were driven higher with 10-year US Treasury bond notes soaring to 1.33 per cent and American Dollar had gained ground against most major and emerging market currencies, leading to a rotation of investors’ appetite to defensives from growth stocks with commodity stocks bearing the heaviest brunt.

Nonetheless, economically sensitive sectors had performed relatively well with S&P 500’s financials’ stocks souring 0.2 per cent, the least among others, while transport stocks, a closely monitored barometer of economic optimism, rose 0.2 per cent, however, energy stocks fell 1.4 per cent following media toplines that Hurricane Nicholas threats had been depreciated.

Earlier in the day, US Commerce Department said in a statement that US retail sales rose by 0.7 per cent in August, beating an analysts’ estimate of a drop of 0.8 per cent, eventually spurring up hopes of taper talks with a majority of Fed policymakers but Chair Powell signalling strong intent to a tapering of fiscal support in a near-term as investors’ focus seemingly had shifted towards the development of September 21-22 Fed policy meet.

Wall St. ends lower after surprise rebound in August retail sales

Citing statistics, in the day’s Wall St. wind-down, trade-sensitive Dow dwindled 0.18 per cent and benchmark S&P 500 shed 0.16 per cent, while tech-heavy Nasdaq added 0.1 per cent to 15,181.92.

Meanwhile, referring to a rotation out of the tech stocks in the day’s Wall Street, a chief market strategist at National Securities in New York, Art Hogan, said, “Tech was the outperformer for most of August, and as we head into September and see more of a normalization on the yield on the 10-year, that has tended to cause a rotation out of tech.

The mega-cap technology names do well agnostic of the pace of economic growth ... but when you start to get reports that the economy may be operating at a pace that's faster than anticipated, then technology tends to be less in favour as compared to cyclicals”.