Stock Market Today: Financials Lead as S&P 500, Nasdaq Set Fresh Highs
Upward pressure on Treasury rates Wednesday helped spur gains in the financial sector on a modest up day for the major indexes.
The S&P 500 and Nasdaq Composite continued to push even further into record territory Wednesday amid a fairly quiet day for the broader markets.
July's durable-goods reading helped provide some positivity; while headline orders declined 0.1% month-over-month, new orders (backing out the volatile transportation category) were up 0.7% MoM.
Treasury yields continued their near-term momentum, climbing as high as 1.35%; that helped financial stocks (+1.2%) produce the day's best sector performance, helped by the likes of JPMorgan Chase (JPM, +2.1%) and Citigroup (C, +1.6%).
Interest rates should remain in the spotlight through Friday, when the Fed holds its annual symposium in Jackson Hole, Wyoming. The event will be entirely virtual this year – "telling us that Fed officials are taking the Delta variant seriously," says LPL Financial Fixed Income Strategist Lawrence Gillum. "We'll have to see if that alters the tapering timeline and, importantly, the market's expectations for when the Fed will start to increase short-term interest rates."
The S&P 500 climbed 0.2% to an all-time high of 4,496, the Nasdaq (+0.2% to 15,041) produced another record finish, and the Dow Jones Industrial Average (+0.1% to 35,405) inched closer to its Aug. 16 high of 35,62
Other news in the stock market today:
- The small-cap Russell 2000 pushed ahead by 0.4% to 2,239.
- Western Digital (WDC, +7.8%) got a jolt after The Wall Street Journal reported the data storage company is in advanced talks to merge with Japanese NAND flash-memory chip maker Kioxia Holdings, according to people familiar with the matter. The all-stock M&A deal could reportedly be valued at more than $20 billion and be finalized as early as mid-September.
- Deere (DE) made headlines after the agricultural equipment maker said it hiked its quarterly dividend to $1.05 per share – a 16.7% increase from its previous payout of 90 cents per share. The new dividend implies an annual yield of 1.1%. DE stock finished the session up 2.3%.
- U.S. crude oil futures climbed 1.2% to settle at $68.36 per barrel after data from the Energy Information Administration showed domestic crude supplies notched a third straight weekly decline for the week ended Aug. 20.
- Gold futures fell 1% to finish at $1,791 an ounce.
- The CBOE Volatility Index (VIX) declined 3.7% to 16.59.
- Bitcoin prices gained 1.1% to $48,797.41. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Your Passport to Cheaper Stocks
As stock prices remain aloft, so too do stock valuations.
The S&P 500 is trading at downright decadent multiples – although the index's forward price-to-earnings ratio is slowly thinning out thanks to improving profit estimates, stocks still are trading near 20-year highs, according to Yardeni Research.
Fortunately, value-minded investors can find relief outside our borders, as stocks in several international markets are trading for much more reasonable prices.
The "easy route" to international exposure goes through exchange-traded funds (ETFs). For instance, these 10 international ETFs – selected with an eye toward minimizing exposure to China amid its tight governmental crackdowns of late – provide access to dozens if not hundreds of stocks at once.
But stock pickers certainly have a wealth of options.
The income-minded should start their hunt with overseas payout royalty – Europe and Canada alike each boast their own Dividend Aristocrats, selected for their dedication to regularly improving cash distributions.
However, if you're just looking for overall buy-and-hold excellence, consider these seven international stocks. Each pick possesses a one-two punch of relatively cheap valuation and potent profit-growth potential.