U.S. stock indexes early Wednesday traded flat, with the S&P 500 and Nasdaq Composite attempting to extend a record climb, amid indications of ebbing economic recovery in parts of Europe as the impact of the delta variant hobbles business activity.

Meanwhile, data showed U.S. durable-goods orders in July declined less than forecast.

What are major stock indexes doing?

The Dow Jones Industrial Average

receded 53 points, or 0.2%, at 35,311, weighed by declines in Amgen Inc. AMGN and UnitedHealth Group Inc.

The S&P 500 index

was trading virtually unchanged at 4,487, down less than 0.1%.

The Nasdaq Composite Index

traded 44 points, or 0.2%, at 15,045, after establishing an intraday all-time high at 15,049.71.

On Tuesday, the Dow climbed 30 points to end at 35,366, while the S&P 500 closed at another daily record at 4,486 and the Nasdaq Composite topped 15,000 points for the first time.

What’s driving markets?

The U.S. equity rally was struggling to gain further traction higher after the S&P 500 index put in its 50th record of 2021 and the Nasdaq Composite closed above a round-number milestone above 15,000 for the first time on Tuesday.

Investors remain focused on monetary policy and the economic outlook amid a resurgence of new COVID cases as the coronavirus delta variant afflicts some U.S. states. Record-setting trade for equities has also come against the backdrop of rising inflation that has been blamed on supply chain bottlenecks and spiking demand as the economy recovers though the Federal Reserve has consistently described rising prices as likely transitory.

Federal Reserve Chairman Jerome Powell is now not expected to explicitly declare plans for tapering market-favorable bond purchases on Friday at a virtual economic symposium of central bankers hosted by the Kansas City Federal Reserve which may also buttress buying on Wall Street.

“This week’s rebound in stocks has been largely predicated on last week’s shift in tone by Dallas Fed President Robert Kaplan, in suggesting he could shift his position on a taper if the economic data deteriorated, a not unreasonable position to take,” said Michael Hewson, an analyst at broker CMC Markets.

In U.S. economic news, orders for durable goods, those lasting at least three years, slipped 0.1% last month for the second time in 15 months, the government said Wednesday, though the fall was largely due to a decline in aircraft orders. Economists polled by the Wall Street Journal had forecast a 0.5% decline. Demand was strong in other parts of the economy despite widespread shortages of materials and labor.

On top of that, House Democrats approved a $3.5 trillion budget resolution and advanced the $1 trillion bipartisan infrastructure bill, which could be viewed as adding further support to the U.S. economy.

“While the process has been protracted, yesterday showed that the fiscal-stimulus-train remains on track for the U.S. economy for the time being, and we should have a better idea of exactly how large the final package will be in a matter of weeks,” said Henry Allen, an analyst at Deutsche Bank.

In Asia, “risk appetite has weakened with markets trading lower for the most part” noted Allen, highlighting that Japan will extend a state of emergency due to COVID-19 to eight more of its 47 prefectures, bringing the total number under restrictions lasting until mid-September to 21.

A Bank of Japan policy maker also warned that the global semiconductor shortage could last through the rest of 2021 if Southeast Asian factories remain closed due to COVID-19 outbreaks.

Elsewhere, the Ifo business climate index, highlighted the weakness of Germany’s economy relative to European peers, declining for the second month in a row in August, underscoring lingering concerns about the spread of the delta variant.

“Germany’s leading indicator joins the choir of recently released leading indicators pointing to a loss of momentum in the German economy,” said Carsten Brzeski, an analyst at ING Bank.

In COVID news, Johnson & Johnson

shared interim clinical data that indicates Americans who have received its single dose COVID-19 vaccine should get a second dose. The company said that two studies examining people who had received its shot found that a second dose boosted antibody levels. The studies haven’t yet been published in a medical journal.

Which companies are in focus?

Express Inc. EXPR shares jumped in Wednesday premarket trading after the apparel retailer reported a surprise profit. Shares were down 5%.

Dick’s Sporting Goods IncDKS shares soared more than 15% in Wednesday after the athletic retailer reported record second-quarter profit and sales. 

Shoe Carnival Inc. SCVL shares were off 3.3% in Wednesday trade after the retailer reported second-quarter earnings and sales that beat consensus and gave an upbeat outlook.

Cassava Sciences Inc. SAVA responded Wednesday to allegations posted overnight regarding the “accuracy and integrity” of trial data for its treatment of Alzheimer’s disease, saying it believed the claims are “false and misleading.” Its stock was down more than 30%.

ICON Technologies Inc., which uses jumbo-sized 3-D printers to build homes, said Wednesday it closed a $207 million series B round of investment led by Norwest Venture Partners, which is backed by Wells Fargo & CoWFC

“Meme” stocks are back in the spotlight, with GameStop Corp. GME off 2.6% on Wednesday and AMC Entertainment Holdings AMC stock up 4.2%.

How other markets are faring

The benchmark 10-year Treasury note

was trading at 1.31%, compared with 1.289% on Tuesday.

In Asia, Tokyo’s Nikkei 225

closed 0.03% lower, while the Hong Kong Hang Seng Index

declined 0.13% and the Shanghai Composite

rose 0.74%

In Europe, London’s FTSE 100

was 0.3% higher as the pan-European Stoxx 600

lifted 0.1%. France’s CAC 40

inched 0.2% higher as Frankfurt’s DAX

slipped 0.1%

Crude-oil prices were higher, with international benchmark Brent crude

rising 0.7% higher at $71.71 a barrel and U.S. benchmark oil
West Texas Intermediate on the New York Mercantile Exchange, up 0.8% at $68.10 a barrel.

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