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Stock Market Ends Flat with No Distinctive Trend

Strategic Insights

— 2 min read

The stock market showed a mixed performance on Wednesday, with traders reacting to unexpected news about sales of new homes plummeting 14.1 percent in June. The unexpected decline in new home sales led to a brief rally in stocks, pushing the Dow Jones industrial average to 3,811.44, but by the end of the session, all three major market averages were just below the previous day's close. The market ended the day with no distinctive trend, leaving investors uncertain about future prospects.

Key Takeaways:

  • The Dow Jones industrial average advanced to 3,811.44 at one point but closed at 3,796.22, off 1.95 points.
  • The Standard & Poor's 500 index closed at 460.56, off 0.45 point, and the Nasdaq composite index closed at 724.80, off 0.05 point.
  • International oil companies faltered, with Exxon falling 7/8, to 59 1/4, Royal Dutch/ Shell Group declining 1 1/8, to 111 3/4, and Mobil dropping 5/8, to 83 3/4.
  • Gold stocks fell by 5-8% as the price of gold was pushed down to a three-month low, while paper stocks moved higher due to plans to increase the price of linerboard and optimism about demand for cardboard boxes.
  • Utility issues were on the plus side, moving in tandem with the bond market, which generally moved higher, except for the 30-year bond.
  • American Cyanamid was a major standout, with its stock price rising 30 points after a $95-a-share takeover offer was announced by American Home Products.

Statistics:

  • The Dow Jones industrial average rose to 3,811.44 before closing at 3,796.22, off 1.95 points.
  • The Standard & Poor's 500 index closed at 460.56, off 0.45 point.
  • The Nasdaq composite index closed at 724.80, off 0.05 point.
  • New home sales plummeted 14.1 percent in June, the slowest pace since June 1992.
  • International oil prices dropped 41 cents, to $20.14 a barrel.
  • Volume on the New York Stock Exchange totaled 295.6 million shares, slightly higher than the yearly average of 287 million shares but significantly greater than Monday's turnover of 258.5 million shares.

Sources:

  • "The burned-out bulls and burned-out bears let the chips fall where they may," said Alan R. Ackerman, executive vice president of Reich & Company.
  • Sales of new homes plummeted 14.1 percent in June, the slowest pace since June 1992 (Source: Bureau of the Census).
  • International oil prices dropped 41 cents, to $20.14 a barrel (Source: Commodity Exchange of New York).
  • American Home Products announced a $95-a-share takeover offer for American Cyanamid (Source: American Home Products).
  • The 15 most-held stocks in the market are shown in the "Favorite Stocks" table (Source: NYSE).

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