The three major indexes on Wall Street ended higher. They rebounded as Government Bonds yields fell after the U.S. Treasury announced it would expand the size of its bond buyback.
On the 19th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished at 53,463.05, up 119.65 points, or 0.22%, from the previous session. The Standard & Poor's (S&P) 500 closed at 7,707.98, up 16.22 points, or 0.21%. The Nasdaq composite also ended at 26,331.09, up 41.38 points, or 0.16%.
Earlier in the day, stocks rose from the start as the U.S. Treasury said it would at least double the size of Government Bonds buybacks, sending long-dated Government Bonds yields lower. Each purchase will increase from a current maximum of $2 billion to at least $4 billion. The expanded buybacks will target the 10- to 30-year sector and will be operated temporarily through Nov. 4, when this quarter's Government Bonds issuance plan takes effect.
The 30-year U.S. Government Bonds yield, which had topped 5.33% in the previous transaction to set a new record high in 19 years, fell as much as 9 basis points (1 bp = 0.01 percentage point) to 5.195% during the session. The 10-year U.S. Government Bonds yield fell 5 bps from the previous session to 4.653%.
Stocks also rebounded on the drop in Government Bonds yields, but the gains were not strong. They largely hovered in slightly positive territory. By sector, health care rose 3.52% and consumer discretionary climbed 2.14%. Materials also gained 1.67%. In contrast, technology, industrials, financials and energy fell.
In particular, despite lower Government Bonds yields, shares tied to artificial intelligence (AI) and semiconductors slumped on news that OpenAI's second-quarter results were disappointing. OpenAI's revenue was preliminarily tallied at $6.7 billion and Anthropic's at $11.6 billion, and investor sentiment appeared to sour on foreign media reports that OpenAI's second-quarter performance was not as strong as expected and was disappointing compared with rival Anthropic. On the news, the Philadelphia Semiconductor Index (SOX) finished at 11,738.23, down 254.24 points, or 2.12%, from the previous transaction.
Among components of the Philadelphia index, Broadcom and AMD each fell about 4%. In a rare exception, semiconductor company Marvell Technology jumped about 10%. Marvell Technology announced a deal to participate in developing custom AI Semiconductor chips with strong demand from Google. It also granted Alphabet, Google's parent company, the right to purchase up to $12.2 billion worth of Marvell Technology equity.
Health care stocks led the market on the day. U.S. drugmaker Moderna soared 176%. The surge reflected successful results showing that a personalized mRNA cancer therapy developed with Merck reduced the risk of melanoma recurrence and metastasis in a late-stage clinical trial. Merck also jumped more than 12%, lifting the Dow.
International oil prices rose as uncertainty in the Middle East persisted. West Texas Intermediate (WTI) rose 0.9% to $85.68 a barrel.