Dow industrials bucked its losing streak of seven sessions on August 3 and the wider market enjoyed a moderate advance by piggybacking a rebound in the crude-oil futures. Major indexes were seen to trade within narrow range of what the strategists called a standard August market.
Dow Jones Industrial Average closed with an up of 0.2 percent or 41 points. The wider Standard & Poor’s 500 and Nasdaq Composite went up by 0.3 percent and 0.4 percent respectively. The markets had opened lower in the earlier part of the day.
Momentum was absent in the stock market during the last week of July, as the shares were weighted down by negative profit growth of S&P 500 for the fourth straight quarter. There were above the average valuations combined with more dip in the oil prices. Crude produced in the US had gone down by 20 percent from recent highs and to below about $40 per barrel. It then went up 3.6 percent to touch $40.94 on August 3.
The only silver news is that Dow is only 1.4 percent off in this period. This can be compared to the previous eight session long losing streak of the Dow in July and also August 2011. At that time, it went south by a massive 6.7 percent or almost 860 points. This happened as investors dumped the stocks over Congressional impasse regarding the raise of debt ceiling. The event has a credit rating agency in the US stripping the United States of its AAA credit rating.
Even with its recent weakness, the Dow in down by only 1.5 percent for the July 20 peak high. It continues to remain up by 5.1 percent on year. In a similar vein, the S&P 500 has dipped about one percent from the July 22 record. It is up by 5.5 percent in 2016.
When it comes to economics, data extracted from Automatic Data Processing Inc. displayed that the private sector added 179,000 jobs in July. It is a little above the estimates. This ADP, although having a little less than stellar record of predicting official job figures, usually sets tone for July nonfarm payrolls. The payroll report is due on August 5. In case of non-manufacturing data, the services sector index made by Institute for Supply Management dipped to about 55.5 during July. It is below the 56 expectations.