Day Traders Diary

8/19/21

The major averages closed mixed with the S&P 500 churned higher Thursday in the face of concerns about the Federal Reserve removing stimulus. The broad index inched up 5 points or 0.13% to 4,405. The Nasdaq Composite added 15 points to 14,541. The Dow Jones Industrial Average shed 66 points, or 0.2%, to 34,894.

The S&P 500 snapped a two-day losing streak while the Dow saw its third-straight losing session. Meeting minutes released Wednesday from the Fed's gathering in July showed the central bank has started eyeing tapering its $120 billion in monthly bond purchases before the year-end.

For the week, the three major indexes are in the red.

Shares of tech stocks including Microsoft and Netflix closed in the green on Thursday, providing support to the major stock averages.

Nvidia's stock jumped nearly 4% after the chip giant's quarterly earnings and revenue beat Wall Street estimates amid strong graphics cards sales.

Defensive stocks like consumer staples and health care names also gained. Procter & Gamble and Merck added 1.2% and 0.9%, respectively.

Meanwhile, stocks closely linked to the economy led losses. Steelmaker Nucor lost 2.8%. Oil companies Devon Energy and Occidental Petroleum shed 3.1% and 5.8%, respectively. Miner Freeport-McMoRan fell 4.3%. General Motors fell 3.5%. Reopening plays like airlines and hotels also closed lower.

WTI crude oil dropped more than 2%, falling to around $64, and copper lost nearly 2% on concern about global growth without the Fed bond-buying support. The 10-year Treasury yield fell 3 basis points to 1.243%. (1 basis point equals 0.01%.)

Robinhood shares tumbled 10.3% after its first earnings report as a public company. The app warned investors that its third-quarter results could be affected by a slowdown in trading.

Investors digested mixed economic data released Thursday. First-time jobless claims last week hit a new pandemic-era low at 348,000, declining more than expected from the week prior.

The Philadelphia Fed Index, a gauge of growth in the region, still indicated expansion but at a level worse than expected. The August reading was 19.4, below the 22 consensus of economists polled by Dow Jones.

Goldman Sachs cut its economic growth forecast for the current quarter to 5.5% from 9% Wednesday night, adding to the negative sentiment. The firm also sees higher inflation than expected for the rest of the year.