The Stock Market This Week: August 10-14

By: Stacey Nickens

On Monday, the Dow Jones gained 1.3%, thanks largely to shares in Caterpillar and Boeing. Boeing’s stocks were up as COVID cases decline nationally and air travel began to increase. Energy, industrials, materials, and consumer discretionary also spurred the S&P 500 upward. The index added 0.3% in daily trading. Large technology companies mostly underperformed, with information technology and communication services declining. The Nasdaq dropped 0.4%. Apple was the one of the few standouts. Apple stock rose after Wedbush raised their price target from $475 to $515. FedEx was also upgraded from Market Perform to Outperform, and stock in MGM Resorts increased after InterActiveCorp purchased a significant stake in the company. Over the weekend, President Trump signed economic relief executive orders, including one to extend unemployment benefits. In addition, tensions between the U.S. and China continued to escalate after China sanctioned 11 U.S. officials. In economic news, job openings increased in June.

On Tuesday, late-day selling hurt major indexes. The S&P 500 declined 0.8%. The Dow Jones dropped 0.4%, and the Nasdaq fell 1.7%. The S&P 500 initially climbed 0.6%; however, Senate Majority Leader Mitch McConnell told Fox News that White House officials have not met with Democrats to discuss a coronavirus relief package. The news shattered earlier-in-the-day gains. As a result, information technology, utilities, real estate, and communication services all finished in the negative. Only financials and industrials were able to make gains. The Producer Price index increased 0.6% in July. Though the price of goods and services have increased, inflation does not seem to be creating significant pressures.

On Wednesday, mega-cap stocks led the charge, pushing the Nasdaq forward 2.1%. The S&P 500 rose 1.4%, and the Dow Jones gained 1.1%. After a tough day on Tuesday, information technology stocks performed strongly on Wednesday. Apple added 3%, and Tesla gained 13% after the announcement of their 5:1 stock split. NVIDIA was also up after their price target was raised to $540. Consumer discretionary, health care, utilities, real estate, and consumer staples made gains in daily trading. In the health care sector, Moderna added a modest 0.8% after reaching a deal with the U.S. government to manufacture and deliver 100 million doses of their COVID-19 vaccine. Despite a strong performance on Tuesday, financials dropped 0.3%. While the government remained deadlocked on a new coronavirus relief package, the ongoing dispute did not seem to hurt the market.

On Thursday, The S&P 500 fell 0.2% due to selling later in the afternoon. Mega-cap stocks helped the S&P 500 maintain some of its earlier-in-the-day gains. Shares in Apple reached record highs, and the information technology sector made modest gains on-the-whole. Between this and positive growth in communication services, the Nasdaq rose 0.3%. The other nine sectors dropped, and the Dow Jones closed 0.3% lower. Both initial and continuing jobless claims dropped. Initial claims fell below one million (963,000) for the first time since March. This is positive economic news; however, the improving jobless claims could reduce pressure on Congress to pass a coronavirus relief package.

On Friday, the S&P closed flat. The Dow Jones gained 0.1%, and the Nasdaq fell 0.2%. Energy, industrials, financials, and materials made small gains; however, utilities declined. The market fluctuated around evidence of a continued deadlock in Washington over a COVID-19 relief package and news that President Trump may send financial aid to states for pandemic resources. Investors were also watching for news of scheduled trade talks between the U.S. and China on Saturday, but Reuters reported that those talks have been delayed. McKesson stock was up in daily trading after the U.S. government partnered with them to distribute COVID-19 vaccines. Applied Materials also made gains after reporting strong quarterly results, and Tesla continued its upward trajectory as BofA Securities and Morgan Stanley upgraded their stock to a Hold rating. Positive economic news continued, with retail sales increasing 1.2% in July and nonfarm labor productivity jumping 7.3%.

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