Daily Stock Market Update — August 22, 2019

Stocks ended an up-and-down day mostly lower as losses for health care and technology companies offset gains in banks and other sectors and more in Thursday’s Stock Market Update.

UnitedHealth Group gave up 3% Thursday and Adobe lost 1.3%.

Remarks from two Federal Reserve bank presidents left investors less certain about the likelihood that the central bank will lower interest rates again next month.

Traders will look for more guidance on the Fed’s next moves Friday when Chairman Jerome Powell is scheduled to speak at the central bank’s annual conference in Wyoming.

“The market is expecting a rate cut in September, and if Powell doesn’t think that consensus is going to be to cut rates, he needs to start preparing the market for that,” said Willie Delwiche, investment strategist at Baird.

Investors now predict a 91.2% likelihood that the Fed will cut its benchmark rate by a quarter-point next month, according to the CME Group, which tracks investor bets on central bank policy. That’s down from 98.5% the day before.

The shift comes after two central bank presidents questioned the need for the Fed to lower rates next month. New economic data also did little to make clear the Fed’s next move. Positive consumer-related data on home sales, retail spending and jobless claims could argue against the need for lower rates. But a closely watched index showing manufacturing activity contracted this month for the first time in a decade, which could help make the case for another cut.

“The market is trying to figure out what Powell is going to say tomorrow,” said Delwiche. “Any news today is being viewed through that context.”

The central bank cut its benchmark rate in July for the first time in a decade to help shore up the economy amid signs of slowing global growth and uncertainty over the U.S.’s escalating trade war with China.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 fell 1 point to 2,922. The Dow Jones Industrial Average rose 49 points, or 0.2%, to 26,252. The Nasdaq fell 28, or 0.4%, to 7,991.

Major indexes in Europe closed lower.

Bond prices fell. The yield on the 10-year Treasury rose to 1.61% from 1.57%.

EYES ON THE FED: The Fed cut its key policy rate on July 31 for the first time in more than a decade. It cited a number of “uncertainties” that were threatening the country’s decade-long expansion, from Trump’s trade battles to slowing global growth.

Investors have been convinced that the central bank will follow up the July rate cut with further cuts at coming meetings, beginning with one next month.

But remarks from Esther George, president of the Fed’s Kansas City regional bank, and Philadelphia Fed President Patrick Harker, have injected some doubt about what the Fed will do next.

In televised interviews, both said they don’t see a need for another rate cut.

George and Eric Rosengren, president of the Boston Fed, dissented from the 8-2 rate cut vote, arguing that they favored no rate cut at all.

TECH TUMBLE: Tech companies took some of the heaviest losses. Microsoft slid 0.7%, while Adobe fell 1.3%.

NOT SO STYLISH: L Brands slid 4.9% after the owner of Victoria’s Secret and Bath & Body Works gave a third quarter earnings outlook that fell below what analysts expected.

LOOKING GOOD: Nordstrom jumped 15.9% after the department store chain reported results that topped Wall Street’s forecasts.

STRONG RESULTS: Dick’s Sporting Goods gained 3.5% after the athletic apparel chain’s second quarter earnings and revenue came in ahead of analysts’ estimates. The company noted growth in all its key segments and raised its guidance for the year.

GOOD QUARTER: BJ’s Wholesale Club vaulted 17.1% after the company reported better-than-expected quarterly results.

HOUSING BOOSTER: Homebuilders surged for the second straight day after average long-term mortgage rates slipped to their lowest level since November 2016. Low mortgage rates give homebuyers more purchasing power. Hovnanian Enterprises led the pack, climbing 5.4%.