Earnings disappointments continue to weigh on the stock market, as both stocks that were priced for perfection and also some that had already been beaten up, continue to see selling pressure. As I have mentioned before, despite the S&P 500 remaining slightly in positive territory, a majority of stocks have been experiencing some degree of a correction. Energy shares for instance have been in a full-fledged bear market. A report today indicated that the average stock in the S&P 500 is now down 14% YTD. Why, then is the S&P 500 still hanging in near break-even for the year? Simply put, there are still a small handful of heavily weighted companies keeping the index afloat.
By the close, the Dow Jones Industrial Average was down 120 points to finish the day at 17,419. The S&P 500 was down 16 points to close at 2083. Gold was up $3 to trade at $1089 per ounce, while oil was down $.49 to trade at $44.66 per barrel WTI. We are getting very close to $43 per barrel number that we hit earlier in the year. It will be interesting to see if it holds.
As the “rolling correction” continues, tomorrow we get the all-important non-farm payroll number (consensus is for about 212,000 new jobs created in July). Some believe that if the number is good then the Fed might feel that they have the cover to begin to raise interest rates as early as September. We shall see. Remember, we just had a lukewarm GDP number and an even weaker inflation cost index number. Let’s see what tomorrow brings. We’ll let you know.
Have a nice evening everyone.