Stock Market News for Aug 24, 2020

Rally in large-cap technology-related firms helped the Nasdaq hit another record high this year on Friday. All the three major indexes closed higher as investors cheered positive economic data.

The Dow Jones Industrial Average (DJI) added 190.60 points, or 0.7%, to close at 27,930.33 and the S&P 500 added 11.65 points, or 0.3% to close at 3,397.16. The Nasdaq Composite Index closed at 11,311.80, adding 46.85 points or 0.4%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.6%, to close at 22.54. Declining issues outnumbered advancing ones for 1.88-to-1 ratio on the NYSE and a 2.04-to-1 ratio on the Nasdaq favored decliners.

How Did the Benchmarks Perform?

Of the 11 major sectors of the S&P 500, seven ended in the positive with the technology sector leading the rally closing 1.2% higher for the session.  In fact, rallyin technology stocks helped the Nasdaq post its 35th record close of 2020.

Shares of Apple Inc. AAPL closed 5.2% higher on Friday and was the highest gainer in the tech-laden Nasdaq and the Dow. Apple stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alongside, positive information on coronavirus vaccine development front favored bullish investors. Shares of BioNTech SE BNTX and Pfizer Inc. PFE rose 10.2% and 0.4%, respectively after the companies announced that they are on track to submit a vaccine candidate as early as October. While shares of Johnson & Johnson JNJ edged up 0.9% after the company reported that it will begin late-stage trial testing in September.

Overall, the S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq Composite recorded 37 new highs and 18 new lows.

Economic Data Underline U.S. Economy’s Strength

Positive economic data highlighted the strength in the U.S. economy and business activity have picked up to the highest since early 2019. The U.S. Composite PMI Index rose to a reading of 54.7 in August, above the 50.3 figure in July. In fact, this month’s reading is the highest since February 2019.

On Friday, the IHS Markit surveys showed that purchasing manager’s indexes for August were better than expected. The reading for manufacturing index came in at 53.6, a 19 month high and above the July’s figure of 50.9. Additionally, the survey also shows that the service sector index rose from 50 in July to 54.8 in August, a 17 month high. Per the IHS Markit report both the manufacturing and services sectors saw resurgence in new orders in August.

Additionally, on Aug 21, the National Association of Realtors reported that sales of existing homes in the U.S. jumped 24.7% in July. Sales of existing homes came in at 5.86 million beating the consensus estimate of 5.41 million and above the prior month’s figure of 4.72 million. Per the trade group’s report, the July’s jump marks the second consecutive month increase and was the largest on record.

Weekly Roundup

For the week ending Aug 21, the S&P 500 and the Nasdaq added 0.7% and 2.7% respectively, while the Dow remained unchanged. Rally in technology-based companies including Apple and Amazon led the S&P 500 and the Nasdaq to close higher for the week. Positive economic data also helped the benchmarks to rally throughout the week. The S&P 500 recorded its longest winning streak since the week ending Dec 27, 2019, when the broader index has risen for five straight weeks.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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