US Stocks Rally Dissipates on Post-Brexit IMF Slowdown Report and Poor Q2 Results
The US markets were mostly lower today as a near three-week rally that took indexes to new highs, finally lost momentum. Coupled with Netflix and other companies reporting disappointing results, and the International Monetary Fund (IMF) predicting a slowdown in Britain after its vote to leave the European Union, it seemed timed for enthusiasm to wane and lock in profits.
Tuesday, July 19, 2016 - 00:00
In mid-afternoon trading, the Dow Jones Industrial was down 0.02% and the S&P 500 stock index was down 0.3%. The Nasdaq also dropped 0.47%. The S&P 500 had surged just over 8% since June 27, when stocks hit a low after the British vote to leave the European Union. Fears that the departure would destabilize the global economy have largely dissipated, but questions remain. The International Monetary Fund trimmed its forecast for global economic growth this year to 3.1% from 3.2%, mostly because of anticipated slowdowns in Britain and other advanced economies as a result of the “Brexit” vote.
Home construction strengthened more in June than economists had expected. Activity was particularly high in the Northeast and West, a report from the Commerce Department showed. The June reading on housing starts was the highest since February, though down from a year earlier.
Investors are anticipating events this week that may help them better gauge the health of the world economy and what it might mean for stock markets. The European Central Bank’s policy rate decision is Thursday, and while no extra stimulus is expected, the bank’s views about the economy could create volatility in markets.
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