The Stock Market This Week: August 17-21
The Stock Market This Week: August 17-21
By: Stacey Nickens
On Monday, the S&P 500 and Nasdaq both gained due to the strong performance of mega-caps and other stable businesses. The S&P 500 added 0.3%, and the Nasdaq rose 1%. Investors focused on more defensive positions as U.S.-China tensions continued to escalate, coronavirus relief talks remained stalled, and a 13F filing revealed Warren Buffett’s Berkshire Hathaway reduced positions in a number of bank stocks. With this being the case, consumer discretionary, real estate, information technology, and health care all gained in daily trading. NVIDIA, Home Depot, and Walmart performed strongly in anticipation of their earnings reports this week. However, financials, energy, industrials, and utilities all dropped. Financials were hurt after it was revealed that Berkshire Hathaway reduced shares in JPMorgan and Wells Fargo. The Dow Jones also declined 0.3%. In economic news, the NAHB Housing Market Index increased in August, showing that there continues to be a strong demand for single-family homes.
On Tuesday, the S&P 500 added 0.2% and set a new closing high for the first time since February. The Nasdaq also rose 0.7%. Both indexes started the day strong after fantastic earnings reports from Home Depot and Walmart. News that housing starts and permits increased in July also helped the market. Afterwards, the S&P 500 dipped as investors sold Home Depot and Walmart shares to profit from their gain. However, investors seeking mega-cap stocks in the middle of the day helped the S&P 500 rebound. Politico also reported that Senate Republicans may introduce a smaller relief package that will provide $300 a week in unemployment benefits, funding for USPS, and additional financial support for small businesses. This is may be hopeful news that retailers will receive the support they need to sustain their strong performances. The Dow Jones dropped 0.2% in daily trading as did energy, financials, utilities, and industrials.
On Wednesday, all major indexes declined as selling accelerated throughout the day. Investors presumably began selling shares in order to capitalize on the S&P 500’s strong performance as well as Apple’s $2 trillion market capitalization. After rising earlier in the day, the S&P 500 dropped 0.4%. The Nasdaq declined 0.6%, and the Dow Jones fell 0.3%. All sectors finished in the negative. The Fed also released their meeting minutes today, and while the minutes weren’t very surprising, their release hurt the S&P 500’s earlier-in-the-day gains. Officials discussed continued concerns about the economy and anticipated a long road to recovery. They also said that they believed yield caps and targets would only offer small benefits to the economy. In individual company news, Target and Lowe’s were both up after strong earnings reports. Johnson and Johnson also made gains after agreeing to acquire Momenta Pharma.
On Thursday, mega-cap stocks pushed the Nasdaq up 1.1%. The S&P 500 made modest gains of 0.3%, and the Dow Jones rose 0.2%. Earlier in the day, the market struggled after initial jobless claims increased to 1.106 million. (Continued jobless claims decreased.) However, strong performances from Amazon, Apple, Microsoft, Alphabet, and Facebook spurred the market on later in the day. Information technology, communication services, consumer discretionary, and real estate all posted positive gains for the day. In individual company news, shares in Uber and Lyft rallied after the companies got a break in their California driver classification disputes. Positions in Intel also rose after they announced a stock repurchase program, and NVIDIA had a good day after a positive earnings report. Shares in Estee Lauder declined after they announced a disappointing earnings report.
On Friday, both the Nasdaq and S&P 500 finished at record highs thanks in large part to Apple’s strong performance in daily trading. The Nasdaq added 0.4%, and the S&P 500 rose 0.3%. The Dow Jones also rallied 0.7% in order to finish flat for the week. The S&P 500 spent most of the day hovering around flatline; however, the technology sector encouraged buying in other areas. In the end, only four sectors finished in the negative. Industrials was also helped by Deere’s better-than-expected earnings report, and the consumer discretionary sector added 0.3% after the release of Existing Home Sales for July. Building on positive real estate news earlier in the week, Existing Home Sales rose a record-breaking 24.7% m/m.
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