U.S. Stocks Trade Mixed as Apple Gains After Split: Markets Wrap

On Aug 31, 2020

(Bloomberg) — U.S. stocks traded mixed, near all-time highs, as investors evaluated the outlook for global growth and central bank stimulus to counter the pandemic.

The Dow Jones Industrial Average led losses after its components were revamped, while the S&P 500 Index dipped as it heads for a fifth straight monthly advance, the longest run in almost two years. Apple Inc. led Nasdaq gauges higher after its stock split 4-for-1, while Microsoft Corp. and Walmart Inc. fell after China said it could block a possible sale of short-video app TikTok.

The Dow Industrial’s constitution changed Monday after Apple’s split, with the iPhone maker’s weighting down to 2.9% from 12%. To maintain tech’s relative sway in the blue-chip index, the overseers added Salesforce.com, ending Exxon Mobil’s long run. Amgen and Honeywell also joined, replacing Pfizer and Raytheon. Tesla Inc.’s 5-for-1 split also took effect. European shares slumped.

With the S&P 500 up 7% this month, investors have taken some comfort in the global economy’s reemergence from virus shutdowns and will be scouring data this week for further clues on the scale of the upswing. Still, with coronavirus infections in the U.S. ticking up again and India becoming the world’s epicenter for new cases, the pandemic is far from beaten and investors seem hesitant to take on more risk.

“To add equity exposure here is doing so at a time where the market is priced for perfection,” said Dave Donabedian, chief investment officer of CIBC Private Wealth Management. “To bet against the market here is a fool’s errand because you’re going against the Fed and a tide of liquidity.”

Elsewhere, equities in Japan outperformed peers in Asia, bolstered by Berkshire Hathaway Inc.’s purchase of stakes in five major trading companies. The yen gave back some of Friday’s gain, the biggest in five months, as Japan searched for a new prime minister. Silver rose, outperforming gold.

West Texas crude oil advanced above $43 a barrel after Goldman Sachs Group Inc. raised its year-end forecast for the commodity.

Here are some key events to watch this week:

Reserve Bank of Australia hands down its policy decision Tuesday.ISM manufacturing data is due Tuesday in the U.S, Australia GDP is due Wednesday.U.S. jobless claims for the week ended Aug. 29 are due Thursday.U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.

Here are the main market moves:

Stocks

The S&P 500 Index fell 0.1% as of 10:05 a.m. New York time.The Stoxx Europe 600 Index fell 0.3%.Japan’s Topix index gained 0.8%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro rose 0.2% to $1.1931.The Japanese yen weakened 0.6% to 106.04 per dollar.

Bonds

The yield on 10-year Treasuries held steady near 0.72%.Italy’s 10-year yield rose 3 basis points to 1.07%.Germany’s 10-year yield increased one basis point to -0.40%.

Commodities

West Texas Intermediate crude climbed 0.3% to $43.10 a barrel.Gold rose 0.4% to $1,972.25 an ounce.Silver strengthened 2.2% to $28.10 per ounce.

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