Stock market news: August 16, 2019

Yahoo Finance

U.S. stocks rose Friday, paring some of the weeks declines after a previous four days of trade angst, geopolitical turmoil and bond market jitters sent risk assets reeling.

Here were the main moves in the market, as of market close.

  • S&P 500 (^GSPC): +1.44%, or 41.08 points

  • Dow (^DJI): +1.2%, or 306.62 points

  • Nasdaq (^IXIC): +1.67%, or 129.38 points

  • 10-year Treasury yield (^TNX): +2.3 bps to 1.55%

Although stocks rallied Friday, they still posted losses for the week, with the Dow down about 1.5% on a weekly basis.

Shares of Nvidia (NVDA) jumped after the major graphics processing units chipmaker reported a shallower year-over-year decline in quarterly revenue than expected after-the-bell Thursday. While current-quarter sales guidance came in light, gross margin estimates were better than consensus expectations, and some analysts said they expected a ramp-up in gaming products containing Nvidia components to help support results in the second half of the year.

Meanwhile, shares of construction Deere (DE) turned around and rose following initial declines in early trading after the company cut its guidance for a second consecutive quarter. Concerns over export-market access, near-term demand for commodities including soybeans, and overall crop conditions have led many farmers to delay making major equipment purchases, CEO Samuel Allen said in a statement.

U.S. Treasury yields largely stabilized after marching lower for much of the week. The 30-year yield held below 2% in early trading, after breaching that level for the first time ever on Thursday. The spread between the 10-year and 2-year yields was at 3 basis points Friday morning, staying in positive territory after turning negative for the first time since 2007 on Wednesday, sparking a sell-off in equities mid-week as investors considered the arrival of the historically reliable recessionary harbinger.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 14, 2019. REUTERS/Eduardo Munoz
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 14, 2019. REUTERS/Eduardo Munoz

Some of those fears have since abated, however, with market pundits from Mohamed El-Erian to former Federal Reserve Chair Janet Yellen suggesting that the 2s10s inversion may not be as reliable a recessionary indicator as in the past.

The CBOE volatility index (^VIX), or the market’s “fear gauge,” fell 10% to below 20 Friday morning, after reaching as high as 24.1 earlier in the week. Higher readings indicate increased market turmoil.

Meanwhile, prices for safe havens slipped amid Friday’s stock increases. Gold futures (GC=F) edged lower by about half a percentage point, but held well above $1,500 per ounce.

The relative sanguine of Friday’s early stock session belied equities’ roller-coaster week. Over the past several days, the Trump administration announced it was delaying tariffs on some goods past a September 1 deadline, while China vowed to retaliate against the upcoming tariffs. Hong Kong’s pro-democracy protests spurred an airport closure at one of the world’s largest commuter hubs. And General Electric (GE) – a mainstay in the portfolios of many Americans – saw its biggest one-day stock loss in 11 years before paring some losses, after being accused of committing fraud “bigger than Enron and Worldcom combined” by well-known whistleblower Harry Markopolos (GE has called the allegations “entirely false and misleading”).

Mark your calendars!
Mark your calendars!

Housing starts unexpectedly dropped in July

New-home building dropped in July for a third straight month, as ongoing land and labor shortages pinched construction even in an environment of lower mortgage rates.

Housing starts fell 4.0% to a seasonally adjusted annual rate of 1.191 million units for the month, the Commerce Department reported Friday. This was below expectations for a monthly increase to rate of 1.256 million units, according to Bloomberg-compiled estimates. June’s data was also downwardly revised to a pace of 1.241 million units, instead of the drop to 1.253 million units previously reported.

A drop in the more volatile multi-family housing segment, which includes apartment buildings, led July’s declines. But the larger single-family homebuilding segment saw a rate of 876,000 housing starts in July, marking the highest level in six months.

And building permits – which serve as a proxy for future home-building – rose a better-than expected 8.4% to a seasonally adjusted pace of 1.336 million, better than the rate of 1.270 million expected. Permits for June were also upwardly revised, showing a drop of just 5.2% to a rate of 1.232 million, versus a previously reported 6.1% decline to a pace of 1.220 million.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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