Dow crawls sideways, NASDAQ advances

Outside the tech sector, US shares have struggled for momentum today, but a huge increase in Facebook’s share price has helped the NASDAQ to extend its gains.

 

Some solid earnings from Dow-component 3M were not enough to offset another decline in Caterpillar today. The 2% slide in the mining-and-construction-machinery maker’s share price marked the company as the biggest slider in the Dow by late afternoon in New York, and its decline kept the Dow just below the break-even point for the day.

The S&P 500 turned around earlier losses to advance 0.22%, while the NASDAQ gained 0.7%, boosted by an incredible 30% jump in Facebook’s share price, following strong results from the social media site after the close last night.

It’s been a good couple of days for the technology-led index, with Apple posting solid results on Tuesday evening and Facebook’s big mobile ad-led rise in revenue yesterday. More big names from the NASDAQ report tonight, including Amazon.com, Expedia and Starbucks.

There were further indications of strength in the manufacturing sector late today, with a big rise in the Kansas City Fed’s manufacturing index. The index climbed from June’s reading of -5 to a level of +6 in July. Earlier estimates had pointed to a reading of 0.

This is a nice positive sign of growth in manufacturing activity for this Federal District and complements other positive readings from the New York Fed and the Philly Fed last week, with the contraction seen by the Richmond Fed looking like an outlier. In a week’s time we get to see the ISM manufacturing index and Markit’s final manufacturing PMI, but expectations will have been raised by this result.

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