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Stock market news: September 19, 2019

Stocks gave up gains Thursday in the last hour of trading, but the S&P 500 still ended within 1% of a record high. Earlier, the three major indices had been higher as investors considered positive new U.S. economic data and digested global monetary policy decisions after the Federal Reserve’s rate cut Wednesday.

Microsoft (MSFT) shares surged to a new all-time high Thursday, after the software giant announced a $40 billion buyback program and quarterly dividend increase after market close Wednesday.

Meanwhile, U.S.-China trade developments continue to play out in the backdrop, with deputy trade negotiators from both countries set to meet for trade talks Thursday and Friday in Washington, D.C.

Here were the main moves in the market at the end of regular trading Thursday:

  • S&P 500 (^GSPC): +0.00%, or 0.06 points

  • Dow (^DJI): -0.19%, or 52.29 points

  • Nasdaq (^IXIC): +0.07%, or 5.49 points

  • U.S. crude oil prices (CL=F): +0.1% to $58.13 per barrel

  • 10-year Treasury yield (^TNX): +1 bp to 1.794%

  • Gold (GC=F): -0.71% to $1,505.10 per ounce

A host of central banks overseas delivered monetary policy decisions Thursday, a day after a divided Federal Reserve cut rates at the close of a second consecutive meeting. Seven of the 17 Federal Open Market Committee members telegraphed at least one more quarter-point cut to rates by the end of the year, while 5 said rates should remain at the new level of between 1.75% and 2.00%, and another 5 said rates should have remained higher at between 2.00% and 2.25%. The Fed has two more meetings this year in October and December.

Central banks take center stage

But other central banks Thursday bucked the trend of cutting rates and easing monetary policy both the Fed and the European Central Bank (ECB) demonstrated this month.

The Bank of England’s Monetary Policy Committee (MPC) left its benchmark interest rate unchanged at 0.75% in a 9-0 vote on Thursday, in a decision broadly inline with consensus economist expectations.

The MPC warned about “entrenched uncertainty” as the prospects of a no-deal Brexit threaten growth in the UK economy, which has led the MPC to be more cautious in rate-setting to leave room for a cushion in the event of a calamitous UK exit from the EU. The BOE has now left its benchmark interest rate unchanged for 13 consecutive months.

Traders work as a screen shows Federal Reserve Chairman Jerome Powell's news conference after the U.S. Federal Reserve interest rates announcement on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid

Meanwhile, the Bank of Japan (BOJ) also left rates unchanged in its policy decision released Thursday, leaving its short-term interest rate at an expected -0.1%. However, Japanese central bankers left the door open to the possibility of cutting rates more deeply into negative territory, with BOJ governor Haruhiko Kuroda saying policymakers were more willing to consider to the notion of additional easing than they had been at their last meeting in July.

In the BOJ’s policy statement, central bankers also left in a line first added at their last meeting noting that the bank “will not hesitate to take additional easing measures if there is a greater possibility that the momentum toward achieving the price stability target will be lost.” Japan – as with the U.S., UK and other global economies – has grappled with stubbornly low inflation, with core inflation in the country slipping to the lowest level in more than two years in August.

September’s BOJ statement also included an added paragraph calling out “slowdowns in overseas economies,” where “downside risks seem to be increasing.”

This echos the worries articulated by many central bank officials, with concerns of a broad-based slowdown serving as the underpinning for many of their recent policy decisions.

Citing similar concerns and especially the impact of the U.S.-China trade war, the Organization for Economic Cooperation and Development (OECD) cut its global growth forecast for 2019 to the lowest level in a decade Thursday. The Paris-based institution said it sees global growth slowing to 2.9% this year from 3.6% last year, and then growing at a 3.0% pace in 2020. Previously, the OECD saw global growth of 3.2% in 2020 and 3.4% for 2020.

“Escalating trade conflicts are taking an increasing toll on confidence and investment, adding to policy uncertainty, aggravating risks in financial markets and endangering already weak growth prospects worldwide,” the OECD said in a statement.

Meanwhile, Norway continued to be an anomaly vis-à-vis the rate decisions of other global central banks, announcing Thursday that it would increase rates by 25 basis points to 1.5% in its fourth rate hike in the past year. The bank said in a statement that the “very low” level of interest rates seen among foreign countries, with more than $15 trillion in negative-yielding world debt, “suggests a cautious approach to interest rate setting.”

ECONOMY: Jobless claims rose less-than-expected last week

Initial jobless claims and continuing unemployment claims came in at lower-than-expected levels for the last reported week, the Department of Labor said Thursday, in another sign of ongoing tightness in the domestic labor market.

New unemployment claims were at a seasonally adjusted 208,000 for the week ending September 14, coming in lower than the 213,000 consensus economists expected. Jobless claims for the week prior were upwardly revised by 2,000 to 206,000.

Continuing unemployment claims fell to a seasonally adjusted 1.661 million, versus 1.672 million expected, for the week ending September 7. For the week prior, continuing claims were upwardly revised by 4,000 to 1.674 million.

Separately, regional manufacturing activity in the Federal Reserve Bank of Philadelphia’s district fell less-than-expected in September, according to a new report Thursday. The headline index for general activity fell to 12.0 from 16.8 in August, with sub-indices for shipments and employment each increasing.

Subindices tracking new orders, however, declined for the month, while the survey’s future general activity index suggested moderating but continued growth over the next six months.

The survey comes on the heels of conflicting reports over the state of the U.S. manufacturing sector, which has broadly underperformed its services counterpart this year. A report Tuesday from the Federal Reserve showed U.S. industrial production broadly rebounded in August from a July decline. Other prints on the U.S. industrial sector, however, including the Institute for Supply Management’s manufacturing index, showed manufacturing activity in the U.S. in contractionary territory in August.

Existing home sales climbed for a second consecutive month in August, this time to a 17-month high, the National Association of Realtors said Thursday, marking another reprieve for a housing market that has been choppy for much of the year.

Sales of previously owned homes rose 1.3% over the month prior to a seasonally adjusted annual rate of 5.49 million. Consensus expectations had anticipated a 0.7% decline to 5.38 million, according to Bloomberg-compiled data. Over last year, sales rose 2.6% in August, representing a second straight month of growth after 16 previous month of year-over-year declines.

Existing home sales grew across all of the four regions tracked by NARs on a yearly basis, led by a 7.6% year-over-year sales jump in the Northeast. Existing home sales comprises most of U.S. home-buying.

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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