US open: Stocks eek out gains ahead of Powell testimony
By Iain Gilbert
Date: Tuesday 30 Jun 2020
(Sharecast News) - Wall Street stocks were higher at the opening bell on Tuesday, the final day of trading for June and the second quarter.
As of 1545 BST, the Dow Jones Industrial Average was up 0.06% at 25,611.76, while the S&P 500 was 0.47% firmer at 3,067.44 and the Nasdaq Composite came out the gate 0.76% higher at 9,948.80.
The Dow opened 15.96 points higher on Tuesday, carrying on yesterday's gains that came despite a spike in new coronavirus cases in certain US states over the weekend.
For the most part, investors will be focussed on testimony from Federal Reserve chairman Jerome Powell and treasury secretary Steven Mnuchin in front of the House Financial Services Committee at 1730 BST.
In prepared remarks for his testimony, which had been released overnight, Powell will tell the committee that the US economic outlook will remain uncertain for some time as a result of the Covid-19 pandemic.
"Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus," Powell will say. "A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities."
Also in focus, Beijing warned that it would retaliate against the US if the Trump administration stripped Hong Kong of its special status and treated it the same as mainland China. While Trump has confirmed the US-Sino trade deal was still in place, it was again seen as being potentially at risk in light of recent developments.
On the macro front, home prices in the States continued moving higher in May, but a bit more slowly than anticipated.
The S&P CoreLogic Case-Shiller national home price index jumped at a month-on-month pace of 1.1%, pushing the year-on-year rate of increase from 4.6% to 4.7%.
Elsewhere, the recovery in factory sector activity in the Chicago area lagged behind the rest of the country in June and hiring continued to falter.
Market News International's Chicago Purchasing Managers' Index rose from a reading of 32.3 for May to 36.0 in June. Economists had forecast an improvement to 42.0.
The other main highlight of the day, the Conference Board's June consumer confidence index rose to 98.1 for the month, well ahead of expectations on the Street for a reading of 91 and a marked improvement on the prior month's print of 85.9.
A loosening of stay-at-home and quarantine restrictions fuelled the reading, raising hope for an economic recovery.
In addition to Powell's testimony, Fed heads Williams, Brainard, Bostic and Kashkari are all scheduled to deliver speeches throughout the course of the day.
In the corporate space, shares in chipmaker Micron were 6.28% stronger at the bell after topping earnings estimates and issuing some strong forward revenue guidance, while athletic wear maker Lululemon stock was 4.87% higher after news broke that it would be acquiring in-home fitness business Mirror for $500m.
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