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Market news

11 July 2019

Major US stock indexes finished trading mostly in positive territory

Major US stock indices have predominantly increased, helped by a rise in prices for individual health sector stocks, as well as the technology segment and expectations of lower interest rates, which have intensified after the report of the Fed Chairman Jerome Powell.

Shares of medical insurers Cigna Corp (CI) and UnitedHealth Group Inc. (UNH) jumped 8.88% and 5.37%, respectively, while McKesson Corp. (MCK) rose 1.87% after the Trump administration abandoned plans to exclude drug discounts from its Medicare health insurance plans. However, the shares of drug manufacturers Merck & Co Inc. (MRK) and Pfizer (PFE) fell by 4.62% and 2.64%, respectively.

Powell’s “dovish” statements also supported the stock market, which again appeared in the US Congress with its semi-annual monetary policy report.

The inflation data for June was also in focus. The report of the Ministry of Labor showed that the consumer price index in June rose by 0.1%, which corresponds to a slight increase in May. Economists had expected consumer prices to remain unchanged. Excluding food and energy prices, basic consumer prices rose 0.3% in June, after rising 0.1% for four consecutive months. Monthly increase in base prices was the highest in 1.5 years. It was expected that core inflation will grow by 0.2%. In the 12 months to June, the base consumer price index rose 2.1% after rising 2.0% in May. The fact that core inflation showed a sharp rise in June did not have a strong effect on expectations of a Fed rate cut this month. According to the FedWatch CME Group tool, traders take into account in quotes the 100% probability of interest rate cuts at the end of July.

Most of the components of DOW recorded an increase (19 of 30). The growth leader was UnitedHealth Group Inc. (UNH; + 5.37%). Outsider were shares of Merck & Co Inc. (MRK; -4.62%).

Most sectors of the S & P finished trading in positive territory. The service sector grew the most (+ 0.2%). The largest decline was shown by the health sector (-0.4%).

At the time of closing:

Dow 27,088.08 +227.88 +0.85%

S & P 500 2,999.91 +6.84 +0.23%

Nasdaq 100 8,196.04 -6.49 -0.08%

Market Focus
  • BOJ keeps policy steady, signals chance of easing in October
  • UK retail sales fell slightly in August
  • Fed lowers interest rates by 25 basis points, as expected
  • SNB leaves policy rate unchanged at -0.75%

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