Wall Street closed mixed on Wednesday as investors weighed the latest inflation reading and continued to monitor corporate earnings. The Nasdaq Composite and the S&P 500 ended in positive territory while the Dow ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.04%, or 21.58 points, to close at 53,770.27. Fifteen components of the 30-stock index ended in the negative zone; 15 ended in the positive.
The tech-heavy Nasdaq Composite advanced 0.5% to close at 26,588.49.
The S&P 500 gained 0.3% to end at 7,748.50. Out of the 11 broad sectors of the broad-market index, eight ended in positive territory, while three were in negative territory. The Information Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE) and the Utilities Select Sector SPDR (XLU) rose 1.1%, 1.1%, and 0.5%, respectively, while the Materials Select Sector SPDR (XLB) fell 1.2%.
The fear gauge, the CBOE Volatility Index (VIX), decreased by 1.2% to 15.28. A total of 15.5 billion shares were traded on Wednesday, lower than the last 20-session average of 17.5 billion. The S&P 500 posted 19 new 52-week highs and two new lows, and the Nasdaq Composite recorded 123 new highs and 95 new lows.
Cooling Inflation Eases Fed Concerns
The Department of Labor reported that consumer price inflation (CPI), a broad measure of prices paid by households, rose 0.1% in July after falling 0.4% in June. The reading was in line with the Zacks Consensus Estimate. The results are somewhat soft and thus do not place upward pressure on interest rates, reducing the likelihood of a September rate hike by the Federal Reserve.
The increase in headline CPI was driven primarily by a 0.1% rise in shelter prices, while energy prices declined 1.5% during the month. Year over year, headline CPI increased 3.4% in July, down from 3.5% in June.
Core CPI (excluding volatile food and energy items) increased 0.2% in July after remaining unchanged in June. The reading was in line with the Zacks Consensus Estimate. On a year-over-year basis, core CPI rose 2.5% in July, compared with 2.6% in June.
Earning Results
Lumentum Holdings Inc. (LITE – Free Report) reported quarterly earnings of $3.23 per share, up from $0.88 a year ago and ahead of the Zacks Consensus Estimate of $2.99 per share. Total revenues were $1.01 billion, up from $480.7 million a year ago and 1.79% above the consensus estimate.
H&R Block, Inc. (HRB – Free Report) reported quarterly earnings of $2.38 per share, up from $2.27 a year ago and ahead of the Zacks Consensus Estimate of $2.23 per share. Total revenues were $1.14 billion, up from $1.11 billion a year ago and 2.48% above the consensus estimate.
Super Micro Computer, Inc. (SMCI – Free Report) reported quarterly earnings of $1.7 per share, up from $0.41 a year ago and ahead of the Zacks Consensus Estimate of $0.68 per share. Total revenues were $11.12 billion, up from $5.76 billion a year ago and 1.09% above the consensus estimate.
Consequently, stock prices of Lumentum, H&R Block and Super Micro Computer surged 13.6%,16.1% and 19%, respectively. Lumentum currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
For the week ended Aug. 7, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 17.4 million barrels from the previous week.
