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US stock indexes finished mixed after early rally fades

Friday, September 20, 2019

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Major US stock indexes ended mixed yesterday (Thursday, September 19) after an early rally lost its strength toward the end of the day.

The S&P 500 managed to hold on to a tiny gain that extended its winning streak to a third day. The benchmark index, which is within 0.7 per cent of its all-time high set July 26, ended the day slightly down for the week.

Gains in health care, technology, utilities and other sectors outweighed losses elsewhere in the market Thursday. Advancers outnumbered decliners on the New York Stock Exchange. Bond yields were little changed.

The market rallied in the early going as investors weighed a batch of encouraging economic reports. The positive data reinforces the outlook from the Federal Reserve, which projects slower economic growth, but not a recession.

On Wednesday, the Fed reduced its benchmark interest rate for the second time this year in a bid to keep the economy from stalling in the face of slowing economic growth overseas and uncertainty over the US-China trade war.

Fed officials were sharply divided in their outlook for future interest rate policy. As a result, the central bank didn't indicate clearly whether more rate cuts were likely this year. Still, Fed officials left the door open for additional rate cuts if the economy weakens.

“That's a nuanced message that markets are beginning to feel comfortable with,” said Kate Warne, chief investment strategist at Edward Jones. “And the fact that the economic data today was a little better than expected is reassuring, as opposed to worrisome, in an environment where there's a lot of variation among voting members (of the Fed).”

The S&P 500 index rose 0.06 points, or less than 0.1 per cent, to 3,006.79. The Dow Jones Industrial Average gave up an early gain, sliding 52.29 points, or 0.2 per cent, to 27,094.79. The Russell 2000 index of smaller company stocks also relinquished an early gain, losing 6.87 points, or 0.4 per cent, to 1,561.47.

The Nasdaq squeaked out a gain of 5.49 points, or 0.1 per cent, to 8,182.88.

Bond prices were little changed. The yield on the 10-year Treasury held at 1.78 per cent.


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