The Stock Market This Week: July 20-24
The Stock Market This Week: July 20-24
By: Stacey Nickens
On Monday, the Nasdaq posted a 2.5% gain, finishing with a record close. Index growth was largely driven by strong performances in big-cap stocks and positive COVID-19 vaccine data from Pfizer and BioNTech. Amazon stock rose after Goldman Sachs and Jefferies raised its target price to $3800, and both Tesla and Microsoft gained in anticipation of their earnings reports. The S&P 500 posted modest gains, with consumer discretionary, information technology, and communication services all rallying. However, energy, utilities, industrials, and consumer staples still fell during Monday’s trading. The Dow Jones closed with little change, growing just 0.03%.
On Tuesday, better-than-expected earnings reports and news of an EU fiscal stimulus package helped major indexes. The S&P 500 grew 0.2%, with positive gains in financials, energy, and industrials. However, informational technology, consumer discretionary, and communication services were all down. Big-cap stocks also had an off day, setting the Nasdaq back 0.8%. The market was further hurt by late but unsubstantiated reports that Senate Majority Leader McConnell did not expect a new fiscal stimulus bill to be finished by the end of the week. The Dow gained 0.6%, bolstered by stronger earnings reports. One of its components, Coca-Cola, rose 2% after exceeding earnings expectations.
On Wednesday, both the S&P 500 and Dow Jones rallied 0.6% while the Nasdaq gained 0.2%. The S&P 500 saw growth in utilities and real estate but drops in energy and financials. Both Microsoft and Tesla continued to perform strongly ahead of their earnings report. Simultaneously, positive gains came after Pfizer and BioNTech earned a vaccine supply agreement with the U.S. government. The market maintained despite President Trump ordering China to close their consulate in Houston. Existing home sales were also released, showing a 20.7% gain from May to June. This is the largest monthly surge on record, though at 4.72 million, existing home sales are still significantly lower than they were in February. As the number of homes for sale remains below prepandemic levels, low supply should increase home prices and improve the outlook for new home demand.
On Thursday, all major indexes tumbled following poor performances from big-cap stocks. The S&P 500 closed 1.2% lower, while the Nasdaq Composite and Dow Jones fell 2.3% and 1.3%, respectively. Although Microsoft and Tesla announced better-than-expected earnings, their price did not respond commensurately. Investors appeared concerned that the same would happen following Apple, Amazon, Alphabet, and Facebook’s earnings reports. Additionally, Goldman Sachs made the controversial recommendation to avoid Apple stocks. They believe big-cap tech won’t be able to sustain their strong recent growth. Many of the S&P 500’s sectors also dropped on Thursday. Information technology, consumer discretionary, and communication services fell while consumer staples, financials, and utilities posted modest gains. Initial jobless claims grew to 1.416 million, and continuing claims decreased to 16.197 million. The growth in new claims suggests COVID-19 reopening rollbacks are continuing to hurt employment recovery efforts.
On Friday, The S&P 500 fell 0.6%, the Dow Jones dropped 0.7%, and the Nasdaq ticked down 0.9%. While most of the S&P’s sectors dropped during Friday’s trading, only health care and informational technology fell more than 1%. The market was hurt when China ordered the U.S. to close their consulate in Chengdu. The Chinese government was retaliating against the U.S. closing the Chinese consulate in Houston earlier in the week. The federal government also delayed passing a stimulus package for another week. In more positive news, home sales rose 13.8% between May and June, growing to a seasonally adjusted annual rate of 776,000. This rate is higher than January’s rate of 774,000.
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