US stocks ended a bumpy trading session on a positive note on Tuesday, with another record for the Nasdaq Composite, even as tech-related names pulled back to outperform in struggling energy sectors, real estate and consumer staples.
Investors analyzed a slew of quarterly U.S. business results and waited for a resolution to the standoff between Congressional Democrats and Republicans over a new tax relief plan for Americans who have been laid off due to the COVID-19 pandemic.
How have the stock indexes performed?
Le Dow Jones Industrial Average DJIA,
picked up 164.07 points, or 0.6%, to 26,828.47, thanks to gains of McDonald’s Corp. MCD,
and Groupe UnitedHealth Inc. UNH,
and capped by a loss in shares of Microsoft Corp.
L’indice S&P 500 SPX,
rose 11.90 points, or 0.4%, to 3,306.51, near its intraday peak, placing it above a round psychological level above 3,300. The Composite Index Nasdaq COMP,
finished at 38.37 points, or 0.4%, to close at 10,941.17, also close to its session highs. According to Dow Jones Market Data, the Nasdaq set its 30th record at the close of 2020, setting aside a benchmark record of exceeding its closing record for all of 2019 and placing it ahead of the 29 records of 2018.
The Nasdaq Composite rose for five consecutive sessions while the S&P 500 and Dow gained for three consecutive trading days.
On Monday, the Dow Jones climbed 236.08 points, or 0.9%, to close at 26,664.40. The S&P 500 SPX,
rose 23.49 points, or 0.7%, to 3,294.61. The Nasdaq Composite gained 157.52 points, or 1.5%, to close at 10,902.80.
What drove the market?
Market participants appear to be betting on progress towards a new coronavirus assistance program for unemployed Americans, but none were due on Tuesday. White House chief of staff Mark Meadows was quoted by the Wall Street Journal as saying a deal seemed far away.
“We’re a long way from making any deal,” Meadows said, emerging from a Republican Senate lunch on Tuesday. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer were due to meet with the Trump administration at 3:30 p.m. EST, but expectations for a deal this week appeared to be fading.
Still, markets took advantage of the lack of progress on strike, betting on under-loved sectors that could benefit from additional budget support after investors piled up in tech and e-commerce stocks that were considered more resilient to the economic environment that the COVID-19 pandemic has created.
Paul Nolte, portfolio manager at Kingsview Asset Management, said he believed investors saw Tuesday as an opportunity to diversify their holdings. “So the rest of the market is catching up today and the value is doing well above growth,” he noted.
A measure of the value, or stocks that trade at a discount to some extent, of the iShares S&P 500 Value ETF IVE,
gained 0.5%, while growth names, represented by the iShares S&P 500 Growth ETF IVW,
, gained 0.2% more moderately over the day. That said, the growth sector’s weekly gain is 1.2%, down from 0.8% so far this week for stock.
The equity gains came as safe-haven assets headed for all-time highs, reflecting uncertainty over the sustainability of the stock rally which was primarily driven by a handful of names and doubts over the economy’s sharp rebound. after the shock of the coronavirus pandemic.
10-year Treasury bill yields TMUBMUSD10Y,
closed at 0.514%, near its lowest all-time close, according to Dow Jones Market Data, while GC00 gold prices,
climbed 1.7% to score its first place above $ 2,000 in history.
“The stock market lives on the largesse of the Federal Reserve,” said Nolte, referring to the trillions of dollars the central bank has distributed to provide liquidity to financial markets, including treasury bills and other fixed income securities, who grabbed during the summit. of this public health crisis.
“Gold is doing well because interest rates have been removed and it costs nothing to hold gold,” the Kingsview fund manager said, adding that investors could also prepare for an unsightly job report from July Friday.
“I think people are worried about these jobs reports due to the number of weekly jobless claims that hasn’t dropped as much as many people expected,” he said.
Markets saw a slight and momentary rally early in the session after a reading of US factory orders rose 6.2% in June to mark the second consecutive rise, indicating a steady rebound after widespread closures in the early stages of the pandemic. Economists polled by MarketWatch had predicted an increase of 4.6%.
Meanwhile, a slowdown in coronavirus infections provided some reason for optimism on the public health front. The Wall Street Journal reported that hard-hit states appeared to be getting a respite from rising cases and hospitalizations, with the United States reporting fewer than 50,000 new coronavirus cases for the second day in a row.
The daily tally of new cases in the United States was over 45,000, slightly lower than the previous day’s total, marking the smallest daily gain since July 6, according to data compiled by Johns Hopkins University. The total death toll in the United States was over 155,000 dead.
What titles were targeted?
- Ralph Lauren Inc. RL,
Shares fell 4.4% on Tuesday after the luxury brand reported first-quarter revenue that missed expectations.
- Actions of Abiomed Inc. ABMD,
fell 1% on Tuesday after the company said its Impella heart pump received emergency use clearance from the Food and Drug Administration as a treatment for some patients with COVID-19.
- Travel agency Booking.com
said it would cut its workforce by 25% in the wake of the COVID-19 pandemic. The shares ended their trading on Tuesday up 1.5%.
- KKR & Co.
Tuesday said its second-quarter profit had grown year on year, marking a pickup for the asset management company. Its stock rose 1.2%.
announced that CEO Jim Hackett is retiring on October 1. Stocks gained 2.5%.
- Space tourism company Virgin Galactic Holdings
said he has entered into depository agreements with a dozen new clients, plans to sell more than 20 million fresh shares. The shares fell almost 14%.
How did other markets trade?
European stock markets have changed little. The Stoxx Europe 600 SXXP index,
decreased by less than 0.1%, and the FTSE 100 UKX,
In Asian trade on Tuesday, China’s CSI 300 index 000300,
gained less than 0.1%, the Shanghai Composite Index rose 0.1%. The Japanese benchmark Nikkei NIK,
climbed 1.7% after gaining 2.2% on Monday.
In other assets, the ICE US Dollar DXY index,
fell 0.1%, abandoning a previous modest gain.
Futures on gross CL00,
rose 69 cents, or 1.7%, to end at $ 41.70 a barrel on the New York Mercantile Exchange, after trading as low as $ 40.14. Gold futures for December GCQ20,
rose $ 34.70, or 1.7%, to close a record high at $ 2,021 an ounce.