The Dow Jones Industrial Average and benchmark S&P 500 clinched new closing highs on Monday even though the broader indexes were little changed during much of the trading session.
Volume on the New York Stock Exchange was about 20% lower than normal in afternoon trading.
First, the scoreboard:
- Dow: 18,531.89, +15.34, (0.08%)
- S&P 500: 2,166.81, +5.07, (0.23%)
- Nasdaq: 5,055.78, +26.20, (0.52%)
- WTI crude oil: $45.21, -$0.71, (-1.55%)
- In US economic data, homebuilder sentiment unexpectedly fell in July. The National Association of Homebuilder’s housing market index dropped to 59 from a five-month high of 60, the level that economists had forecast it would remain at. All three components that the NAHB surveyed its members on — current sales, future sales expectations, and buyer traffic — fell in July. NAHB Chairman Ed Brady said in the release that members in some markets complained about regulatory constraints, inadequate lots, and labour shortages. The three-month averages of the regional indexes, which reduce some of the month-to-month volatility, were largely unchanged.
- Fiat Chrysler is being investigated by the US government on whether it violated securities laws, according to Bloomberg. The report recounted a January lawsuit in which “dealerships in Illinois and Florida that alleged the sales were padded through a scheme by which dealers — sometimes unbeknownst to their owners — were paid to create false New Vehicle Delivery Reports.” The investigation is focused on sales of vehicles to customers, not dealerships. “FCA confirms that it is cooperating with an SEC investigation into the reporting of vehicle unit sales to end customers in the US,” the company said in a statement.
- Bank of America beat expectations in the second quarter. The firm reported earnings per share of $0.36 on revenues of $US20.6 billion. Analysts were expecting earnings per share of $US0.33 on revenue of $US20.4 billion, according to Bloomberg. Total trading revenues, excluding a net debt valuation adjustment, came in at $US3.70 billion in Q2 ($US3.44 billion expected), up 12% and the highest second-quarter revenues in five years. Equities and investment banking revenues fell year-on-year.
- Fintech now has its own index. Nasdaq and KBW launched a new index on Monday that will track the performance of companies that use technology to deliver financial products and services. It represents approximately $785 million in total market cap, and has 49 fintech companies including major data, exchange, trading and payments companies. Global investment in fintech ventures in the first quarter of 2016 reached $US5.3 billion, a 67 per cent increase over the same period last year, according to a report by Accenture last month.
- Nigeria, Africa’s largest economy, is struggling to contain inflation. The National Bureau of Statistics said Nigeria’s inflation spiked to 16.5% in June from 15.6% in May, the highest since October 2015. The sharp increase in inflation comes after Nigeria finally did the painful thing everyone said it had to do: unpeg the naira from the US dollar. “With the currency expected to come under further pressure in coming months, we expect inflation to rise further to close to 20% year-over-year by year-end,” Barclays’ Ridle Markus and Dumisani Ngwenya said in a note to clients.
- GameStop shares jumped by more than 8% after CEO Paul Raines told CNBC that sales at stores that were Pokémon Go gyms in the app were up 100%. Gyms are real-world places where players can take their Pokémon for battles, and 462 of them were at GameStop stores this past weekend. The popular location-based smartphone is also helping GameStop sell merchandise, Raines said. In the first quarter, GameStop reported a 29% plunge in new video game hardware sales year-on-year, and a 7% drop in digital sales.
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