The Stock Market This Week: August 3-7

By: Stacey Nickens

On Monday, the S&P 500 gained 0.7%. The Dow Jones rose 0.9%, and the Nasdaq climbed 1.5%. Growth stocks led the way, with strong performances from both Apple and Microsoft. Both companies gained in Monday trading, as Microsoft continued talks to acquire TikTok. Apple was still performing strongly on the heals of their strong earnings report last Friday. Information technology and health care posted the most growth, while real estate and utilities fell more than 1%. Among health care stocks, Eli Lilly’s positions advanced as the company began Phase 3 trials for their COVID-19 treatment. Varian Medical’s stocks also rose after the announcement of their acquisition by Siemens Healthineers. The ISM Manufacturing Index for July rose to 54.2% from 52.6% in June. Staying above 50%, the index suggests manufacturing continued to expand instead of contract.

On Tuesday, all major indexes made gains. The S&P 500 was up 0.4%. The Nasdaq also climbed 0.4% to close at record highs, and the Dow Jones rose 0.6%. The energy sector posted the largest gains as oil prices rose. Most other sectors also performed strongly, with the exception of health care and financials. Financials were hurt by activity in the Treasury market that reflected the continued deadlock over a coronavirus relief package. Otherwise, Washington’s debates did not seem to significantly impact the market. Advanced Micro Devices surged 9.5% due to the belief that they will see increases in demand as Intel continues to experience production issues. Factory Orders for June increased 6.2% month over month, further evidence that business spending rose last month.

On Wednesday, cyclical stocks led the charge, pushing the S&P 500 up 0.6%. Both the Nasdaq and Dow Jones increased as well — 0.5% and 1.4% respectively. Cyclical industrials, materials, and financials all gained. Amazon also drove consumer discretionary upwards after positive COVID-19 vaccine news from Novavax. Walt Disney was the Dow’s strongest performer. Their stocks rose 8.8% after reporting better-than-expected streaming and profit numbers. However, utilities, real estate, and consumer staples all fell. Growth-oriented stocks also largely underperformed. Yet, Square still rallied after a strong earnings report. The ISM Non-Manufacturing index rose to 58.1% for July from 57.1% for June. The report suggests that business activity continued to improve despite the Employment Index falling. Employers are likely not bringing on new staff due to economic volatility. June’s trade deficit also declined compared to May as export and import activity increased.

On Thursday, mega-cap stocks were the star. Apple, Microsoft, Amazon, Alphabet, and Facebook all posted strong gains, sending the Nasdaq up 1%. The S&P 500 also closed 0.6% higher thanks to positive growth in communication services, information technologies, and consumer discretionary. Energy, health care, materials, and financials all fell in daily trading. The Dow Jones rose 0.7%. Initial jobless claims fell by 249,000 for the week ending in August 1. Jobless claims came in better than expected; however, with claims still above 1.1 million, the labor market is clearly still hurting. The U.S. Dollar Index fell 0.1%.

On Friday, The S&P 500 gained just 0.1%. The Dow climbed a modest 0.2%, while the Nasdaq fell 0.9%. Markets responded well to July’s improved unemployment rate of 10.2%. Financials, industrials, utilities, and real estate were all up. However, information technology fell 1.6%. Congress has yet to come to an agreement over a Coronavirus relief package, and tensions continue to escalate between the U.S. and China. President Trump signed an executive order banning U.S. citizens from using China-based services TikTok and WeChat, unless these services are sold to other companies. T-Mobile stock climbed after they claimed they had become the United States’s second-largest wireless provider. UPS also gained after announcing holiday shipping fees for some customers, and Biogen’s stocks performed strongly after the FDA fast-tracked their Alzheimer’s drug.

For more information on stock market performance this week, subscribe to ELM3’s Weekly Market Update.

Source: briefing.com