Wall Street Close: Trades mixed amid diverse data, taper talks and firmer earnings

• US equity benchmarks post mixed performance, mostly lower amid downbeat sentiment, firmer yields.
• Fed Vice Chair Clarida, US Treasury Secretary Janet Yellen renew tapering concerns, virus woes also weigh on risk appetite.
• ADP Employment Change adds strength to risk-off mood, ISM Services PMI can’t save the bulls.
• GM fails to cheer better than forecast earnings, Ribonhood Markets rallied over 50%.

After a tumultuous start to the week, US shares marked a mixed performance, mostly on the lower side, by the end of Wednesday’s North American trading session. While chatters over tapering could be heard loudly, disappointment from the early signal to Friday’s Nonfarm Payrolls (NFP) and the virus woes roiled investor sentiment.

US Federal Reserve (Fed) Vice Chairman Richard Clarida raised hopes of tapering in 2021 and rate hikes by 2023 if core inflation hits 3% this year. Backing the move was US Treasury Secretary Yellen who said, per Bloomberg, “By the end of this year inflation will be running at a level consistent with the Fed’s target.”

These comments joined ADP Employment Change for July, which slumped to 330K versus 695K expected and 680K revised down prior, to weigh on the equities. It should be noted that upbeat readings of ISM Services PMI for July, 64.1 versus 60.4, may have helped the technology stocks even as the 10-year Treasury yields recovered from a 12-day low.

Against this backdrop, Dow Jones Industrial Average (DJI) dropped 323.73 points of 0.92% to around 34,792 whereas S&P 500 shed 0.46%, or 20.47 points, to close the day near 4,402. On the contrary, Nasdaq rose 19.2 points or 0.13% to end Thursday’s trading close to 14,780.

Stock-specific details suggest that the GM failed to cheer upbeat earnings, dropped around 9.0%, on fears over the automobile sector that also drowned Ford Motors. On the same line were BorgWarner Inc. and Kraft Heinz Co.

Alternatively, Robinhood Markets jumped over 50% amid chatters over Cathie Wood’s interest. Furthermore, Facebook and Netflix helped Nasdaq to remain firmer.

On a broader front, stimulus deadlock and fears of recently escalating virus numbers in the US, China, Australia and India challenge the market players ahead of the key US NFP. For today, a light calendar, with weekly jobless claims and Fedspeak, may entertain traders.