MARKET SNAPSHOT: U.S. Stocks Pause After 2-day Rally
May 26 2016 - 10:33AM
Dow Jones News
By Anora Mahmudova and Victor Reklaitis, MarketWatch
Pending home sales surge in April
U.S. stocks paused Thursday after two days of strong gains as
crude prices retreated from the $50 a barrel level in early New
York trade.
Investors brushed off better-than-expected economic reports.
Orders for durable goods
(http://www.marketwatch.com/story/us-durable-goods-orders-jump-34-in-april-2016-05-26)
manufactured in the U.S. jumped in April, fueled by higher demand
for new cars, trucks and commercial jets. But a key measure of
business investment fell again. Meanwhile, weekly jobless claims
(http://www.marketwatch.com/story/jobless-claims-drop-10000-to-268000-2016-05-26)
fell to a one-month low, suggesting the labor market remains
robust.
A gauge of pending home sales jumped
(http://www.marketwatch.com/story/pending-home-sales-surge-51-to-a-10-year-high-in-april-2016-05-26)in
April, rising to the highest since February 2006. Sales of new
homes also surged in April
(http://www.marketwatch.com/story/new-home-sales-roar-back-crushing-forecasts-with-a-619000-annual-pace-in-april-2016-05-24),
a sign that builders are stepping up construction as demand for
housing remains robust.
The Dow Jones Industrial Average was off by 13 points, or 0.1%,
to 17,836, consolidating after a 359-point rally over the previous
two sessions. The S&P 500 pulled back 2 points, or 0.1%, to
2,088, while the Nasdaq Composite was down 5 points, or 0.1% at
4,890.
"While we saw a nice rally over the past few days, and it
appeared the market is signalling that it can handle rate hikes, I
would questions whether this rally is sustainable, because earnings
growth is still negative," said Karyn Cavanaugh, market strategist
at Voya Investment Management.
Brent crude briefly rose above $50 a barrel on Thursday
(http://www.marketwatch.com/story/brent-crude-tops-50-a-barrel-for-first-time-since-november-2016-05-25)
for the first time in six months, and West Texas Intermediate crude
also has briefly traded above the $50 mark.
WTI futures were up 0.3% at $49.72 a barrel.
The Dow average turned 120 years old on Thursday. Read how to
use that market to your advantage
(http://www.marketwatch.com/story/how-to-use-the-dow-industrials-to-your-best-advantage-2016-05-26).
Individual movers:Dollar General Corp.(DG) reported adjusted
quarterly profit that missed forecasts, but revenue topped
expectations
(http://www.marketwatch.com/story/dollar-general-profit-beats-but-sales-fall-short-in-first-quarter-2016-05-26).
Shares rose 2.5%.
Signet Jewelers Ltd.(SIG) posted adjusted quarterly profit that
beat, but revenue missed. Shares fell 8.9%.
Abercrombie & Fitch Co.(ANF) dived 13% as the retailer's
same-store sales fell 4% and its quarterly loss was bigger than
expected
(http://www.marketwatch.com/story/abercrombies-sales-slip-as-shopper-traffic-stalls-2016-05-26).
Costco Wholesale Corp.(COST) revealed late Wednesday that its
sales stagnated in its third quarter
(http://www.marketwatch.com/story/costco-sales-stall-in-third-quarter-2016-05-25),
but shares were up 5.4%.
Other markets:European stocks
(http://www.marketwatch.com/story/european-shares-waver-as-spanish-banks-slide-oil-stocks-rise-2016-05-26)
have been trading slightly higher, and most Asian markets closed
with modest gains
(http://www.marketwatch.com/story/oils-rise-buoys-asian-energy-shares-2016-05-26).
Gold futures advanced, and a key dollar index inched lower.
Economic news: Japanese Prime Minister Shinzo Abe on Thursday
reportedly warned
(http://www.marketwatch.com/story/are-commodities-signaling-a-lehman-sized-meltdown-japans-abe-thinks-so-2016-05-26)
that the commodities selloff in the last two years could indicate
another global financial crisis is coming.
At 10 a.m. Eastern, an April report on pending home sales is
expected, with 0.8% growth forecast.
On the Federal Reserve front, Fed Gov. Jerome Powell is slated
to speak on the economy and monetary policy in Washington, D.C., at
12:15 p.m. Eastern. Speaking in Singapore, St. Louis Fed President
James Bullard noted the U.S. job market is relatively tight and
could put upward pressure on inflation, according to a Reuters
report
(http://www.reuters.com/article/us-usa-fed-bullard-idUSKCN0YH10B).
(END) Dow Jones Newswires
May 26, 2016 10:18 ET (14:18 GMT)
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