US Stocks Edge Closer to Record Highs

Published August 26th, 2020 - 08:00 GMT
US Stocks Edge Closer to Record Highs
The Dow Jones Industrial Average was down 127 points, or 0.4%, at 28,181, and the Nasdaq composite was up 0.1%. (Shutterstock)
Highlights
The S&P 500 was flipping between small gains and losses in morning trading and was virtually unchanged, as of 10:45 a.m. Eastern time.

U.S. stocks are drifting close to their record heights Tuesday, as momentum slows on Wall Street, said AP.

The S&P 500 was flipping between small gains and losses in morning trading and was virtually unchanged, as of 10:45 a.m. Eastern time. The Dow Jones Industrial Average was down 127 points, or 0.4%, at 28,181, and the Nasdaq composite was up 0.1%.

 

The market lost a bit of fuel after a report showed that consumer confidence unexpectedly dropped this month, contrary to economists’ forecast for a strengthening. It added to what’s become a mixed picture of the economy, which has shown signs of slowing after its initial burst off the bottom in the spring, which itself followed a historic plummet into recession.

 

Earlier in the morning, most stocks on Wall Street had been edging higher after the United States and China said they held constructive talks as they negotiate how to implement their “Phase 1” deal, which set a truce in their trade war.

 

The market has been making a lot of small moves recently on snippets of news about the virus, developments on a potential vaccine for it and other concerns. But the economy is still hurting, with airlines running at a fraction of their capacities and restaurants still mostly empty.

 

Adding to the cup was an announcement from the U.S. Trade Representative that “both sides see progress” following trade talks between the world’s two largest economies. China’s Ministry of Commerce said the two sides discussed strengthening coordination of their economic policies, though it gave no details.

 

Tensions between the United States and China have been ramping up recently, with President Donald Trump targeting Chinese technology companies in particular. The worsening relationship has been one of the bigger concerns for investors, particularly given how destructive the escalating tariffs of the U.S.-China trade war were for the global economy earlier.

 

The U.S.-China trade tensions are just one of the many on a long list of worries dogging the market, headlined by the coronavirus pandemic and the devastating worldwide recession it caused.

 

Other concerns include whether Congress can get past its partisan disagreements to agree on sending more aid to the economy, which investors say is desperately needed, and whether stock prices have become too expensive relative to how much profit companies are producing.

 

But none of those concerns has been loud enough to keep the S&P 500 from plowing to new record heights by the day. The benchmark index returned to an all-time high last week after erasing the last of its losses from the pandemic. If it rises again Tuesday, it will be the fourth straight gain for the index.

 

Underlying it all is massive support for markets and the economy from the Federal Reserve. The central bank has slashed short-term rates to nearly zero and is buying all kinds of bonds, which helps drive some investors into the stock market and push up its prices.

 

The Fed’s chair, Jerome Powell, will give a highly anticipated speech later this week, where investors expect to hear him talk about next steps for monetary policy. The yield on the 10-year Treasury rose to 0.70% from 0.64% late Monday.


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