The market took a breather today after Monday’s terrific excitement over Jackson Hole, dipping a hair but nowhere near enough to even dent the S&P’s 3% gain in August capping seven straight months of gains. But the skeptics were back today with a new Reuters poll showing that the S&P is unlikely to rise much further in 2021, quite a change from Monday’s forecast which ended the year at 11 percent. Tech stocks are expected to continue to do great as long as the Fed’s commitment to low interest rates holds true. For once, and now that Jackson Hole is behind us, volume was above average at 9.8 billion. 

Tue  August 31, 2021  5:40 PM

Wall Street's subdued finish fails to detract from strong August

By David French

DJ: 35,399.84  -55.96         NAS: 15,265.89  +136.39        S&P: 4,528.79  +19.42     8/30

DJ: 35,360.73  -39.11         NAS: 15,259.24  -6.66             S&P: 4,522.68    -6.11      8/31

Aug 31 (Reuters) - Wall Street finished marginally lower on Tuesday, although the slightly subdued ending to August failed to detract from a strong monthly performance by its three main indexes, in what is traditionally regarded as a quiet period for equities. Having all posted lifetime highs in the second half of the month, including four record closings in five sessions for the S&P 500 prior to Tuesday, the three benchmarks were weighed by technology stocks on the final day.  For the S&P, which rose 2.9% in August, it was a seventh straight month of gains, while the Dow and the Nasdaq advanced 1.2% and 4%, respectively, since the end of July.  The performance reflects the level of investor confidence in U.S. equities derived from the Federal Reserve's continued dovish tone toward tapering its massive stimulus program.

"After all the monetary and fiscal interventions, the question is where do we go from here? Does the S&P go to 5,000, and how does it get there?" said Eric Metz, chief executive officer of SpringRock Advisors.  While a strong recovery in economic growth and corporate earnings have boosted U.S. stocks, investors are concerned about rising coronavirus cases and the path of Fed policy.  U.S. consumer confidence fell to a six-month low in August, according to survey data from the Conference Board on Tuesday, offering a cautious note for the economic outlook. read more

A Reuters poll last week showed strategists believe the S&P 500 is likely to end 2021 not far from its current level. read more  "Where's leadership going to come from, for equities to power higher? Is it earnings growth, is it growth versus value, technology or energy? This needs to be defined, but I think the next leg-up for equities will be sector driven," Metz added.  Technology stocks have continued to garner interest from investors in recent days, given the benefits which lower rates have on their future earnings, although the sector's index (.SPLRCT) was among the worst performers on Tuesday.

Shares of Apple (AAPL.O) fell 0.8% after hitting a lifetime high in the previous session, while Zoom Video Communications Inc (ZM.O) tumbled 16.7% as it signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom. read more  Seven of the 11 major S&P sectors retreated. Among those that did not were the real estate (.SPLRCR) and the communications services (.SPLRCL) indexes, which closed at record highs.

On Tuesday, the Dow Jones Industrial Average (.DJI) fell 39.11 points, or 0.11%, to 35,360.73, the S&P 500 (.SPX) lost 6.11 points, or 0.13%, to 4,522.68 and the Nasdaq Composite (.IXIC) dropped 6.66 points, or 0.04%, to 15,259.24.

Kansas City Southern (KSU.N) dropped 4.4% in afternoon trading after the U.S. rail regulator rejected a voting trust structure that would have allowed Canadian National Railway Co (CNR.TO) to proceed with its $29 billion proposed acquisition of its U.S. peer. read more

Volume on U.S. exchanges was 9.84 billion shares, compared with the 8.98 billion average for the full session over the last 20 trading days.

The S&P 500 posted 43 new 52-week highs and no new lows; the Nasdaq Composite recorded 119 new highs and 23 new lows.