Wall Street pares early gains as market sentiment weakens
After starting the day slightly higher, major equity indexes in the U.S. extended their gains during the first half of the session amid the strong performance of the European indices but failed to preserve its momentum to close the day lower.
The Stoxx Europe 600 Index closed the day 0.27% higher at 374.95 while Germany's DAX 30 Index and the U.K.'s FTSE 100 Index gained 0.7% and 0.6% respectively after the ECB President Mario Draghi during the press conference said that the economic growth in the euro area was stronger than estimated and broad-based.
As Hurricane Irma is approaching the state of Florida, the Dow Jones U.S. Insurance index lost more than 2%, weighing on the Dow Jones Industrial Average. The index closed the day 26.3 points, or 0.12%, lower at 21,781.34 points. “There’s further uncertainty because of Hurricane Irma that is supposed to be hitting Florida. You don’t know what kind of damage it is going to do, maybe it will have a negative impact upon U.S. GDP growth and it might hurt U.S. earnings, and that’s probably why the markets are reacting negatively,” John Praveen, managing director at Prudential International Investments Advisers in Newark, New Jersey, told Reuters.
The weak market sentiment increased the demand for safe-havens such as T-bonds, dragging the yields lower and weighing on the S&P 500 financials index .SPSY, which lost nearly 2% on the day. The S&P 500 erased its early gains to close the day nearly flat. Fueled by the solid gains witnessed in tech giants Microsoft's and Amazon's shares, the tech-heavy Nasdaq Composite added 4.55 points, or 0.07%, to end the day at 6,397.87.
Headlines from the U.S. session:
- U.S. Senate passes disaster aid, govt. funding, higher debt ceiling - Reuters
- US Pres. Trump: Military action would certainly be an option in N.Korea
- Continue to expect broad dollar depreciation - Nomura
- US Dollar headed first daily close below 92 in more than 2 years
- Draft UN resolution on North Korea sanctions - UOB
- Fed's Mester: Monpol needs to be systematic, but should not base policy on a single rule
- Trump, Schumer agree to pursue plan to repeal the debt ceiling - Washington Post
- Fed's Mester: Further gradual interest-rate rises will be needed
- European stocks close day higher on Draghi remarks
- ECB's Draghi: Decisions on QE in Oct, volatility in FX rate a source of uncertainty
- US: Weekly initial claims was 298,000, an increase of 62,000 from previous week
- US: Productivity rises 1.5% in 2nd quarter 2017 (annual rate); unit labor costs rise 0.2%
- US: IBD/TIPP Economic Optimism Index climbed 1.7% to 53.4