The Wednesday Market Minute
- Wall Street opens mixed, with the Dow rebounding from a two-month low, as investors question the strength of the domestic recovery and the prospect of higher corporate tax rates.
- Global stocks retreat following a weak set of economic data from China as August retail sales, as well as its factory output, slowed notably in August amid COVID restrictions.
- Macau's crackdown on gaming added to market unease as casino stocks shed $14 billion in value in Hong Kong trading.
- Benchmark 30-year bond yields fall to an August 5 low of 1.827% as inflation concerns ease.
- Oil scales fresh multi-week highs as the dollar retreats and API data shows a 5.3 million decline in domestic crude stocks.
U.S. stocks traded higher Wednesday trading, with the Dow rebounding from a two-month low, as investors question the strength of the domestic and global recovery and the prospect of higher corporate tax rates.
A closely-tracked set of data from China, the world's second-largest economy, showed both a slump in retail sales and cooling factory activity last month in what could be an ominous sign for the region as COVID cases accelerate in the southeastern province of Fujian ahead of next month's week-long national holiday.
China's latest corporate sector crackdown, this time taking aim at the $36 billion a year gaming business in the special protectorate of Macau, only added to market's unease.
In the U.S., the prospect of higher corporate taxes in House Democrats' $3.5 trillion budget bill are adding to investor concerns regarding growth and inflation, although the latter was dispelled by a slower-than-expected reading for August CPI yesterday that could provide the Federal Reserve with a bit more time to consider it next policy move.
Extended gains for oil and energy prices helped the Dow Jones Industrial Average rise 100 points by mid-day, while the broader S&P 500 notched a 12 point bump. The tech-focused Nasdaq Composite edged 8 points lower 10-year note yields held at 1.28% following yesterday's inflation easing and Apple (AAPL) - Get Free Report shares extended their recent declines.
Microsoft (MSFT) - Get Free Report shares were a a notable early mover, rising 1.2% to $303.50 each after the world's second-largest tech company unveiled plans to boost its quarterly dividend and buyback additional shares.
Apple fell amid a lukewarm reception from analysts and tech watchers for its newly unveiled iPhone 13. Shares in the tech giant were marked 0.8% lower in mid-day trading and changing hands at $146.95 each.
Away from tech, the biggest pre-market movers were in the gaming space, as shares of U.S. casinos with operations in Macau tumbled after set out to make major changes to licensing rules in the world's biggest gaming up.
Las Vegas Sands (LVS) - Get Free Report shares were marked 3.6% lower in early trading at $37.30 each. Wynn Resorts (WYNN) - Get Free Report meanwhile, tumbled 8.3% to $84.60 each and MGM Resorts International (MGM) - Get Free Report fell 4.9%.
Oil prices surged higher Wednesday, as well, extending gains triggered by the damage from Hurricanes Nicholas and Ida, after the Energy Department reported a bigger-than-expected decline in domestic crude inventories.
The Energy Information Administration said U.S. crude stocks declined by 6.4 million barrels over the week ending September 10, more than twice the consensus market forecast. Gasoline stockpiles are now at their lowest levels since 2017, the EIA said.
WTI crude futures for October delivery were marked 2.6% higher on the session at $73.04per barrel following release of the EIA data, while Brent crude contracts for November, the global benchmark, added 3.4% to trade at $76.10 per barrel.
In overseas markets, weak China data and the fastest August inflation print from Britain in nine years, where CPI rose 3.2% from last year, pulled the European Stoxx 600 0.4% lower by mid-day trading, while the Asia region benchmark, the MSCI ex-Japan index, fell 0.7%.