Broad rally led by tech stocks pushed benchmarks to finish higher on Wednesday. The S&P 500 closed inches below its all-time high set in February, and investors kept an eye on the second coronavirus stimulus bill and stronger-than-expected economic data.
The Dow Jones Industrial Average (DJI) rose 289.93 points, or 1.1%, to close at 27,976.84 and the S&P 500 gained 44.66 points, or 1.4% to close at 3,380.35. The Nasdaq Composite Index closed at 11,012.24, adding 229.42 points, or 2.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 7.3%, to close at 22.28. Advancing issues outnumbered declining ones for 1.70-to-1 ratio on the NYSE and a 1.34-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
Of the 11 major S&P 500 sectors only financials closed in the negative territory, while the technology sector closed 2.3% higher for the session. The tech-laden Nasdaq surged with tech giants like Microsoft Corporation MSFT, Apple Inc. AAPL and Amazon.com, Inc. AMZN gained at least 2.6%, while Facebook, Inc. FB and Netflix, Inc. NFLX were up at least 1.5%.
Additionally, on Wednesday, a 13.1% jump in Tesla, Inc.’s TSLA shares boosted the Nasdaq, after the company announced a five-for-one stock split in an attempt to make its shares more accessible to employees and investors. Tesla carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Overall, the S&P 500 posted 33 new 52-week highs and no new lows, while the Nasdaq Composite recorded 80 new highs and 25 new lows.
Markets Awaiting News on Stimulus Talks
Investors on Wednesday appeared least responsive to Democratic presidential nominee Joe Biden’s announcement of Senator Kamala Harris as his choice for vice president. In fact, investors seemed to have shrugged off uncertainties over a second coronavirus stimulus bill and avoid sell-off based on stimulus talks.
On Wednesday, House Speaker Nancy Pelosi said both houses were still “miles apart” on the coronavirus stimulus bill negotiations. In fact, Pelosi and Senate Democratic Leader Chuck Schumer released a joint statement on Aug 12 which stated that “the White House is not budging from their position concerning the size and scope of a legislative package.”
Stronger-than-expected Economic Data
A slowdown in the number of new cases and optimism over coronavirus vaccine development has been the major drivers for markets’ recent rally. Additionally, strong economic data also indicate that the recent loss of momentum in economic recovery is beginning to reverse.
On Wednesday, the government reported that the consumer price index rose 0.6% in July, for the second month in a row. The reported figure beats the consensus estimate of a 0.3% rise. There was significant rebound in cost of many goods and services such as gas, automobiles, clothing and airfare, which rose in July from the pandemic lows.
Stocks that Made Headline
Cisco Q4 Earnings Beat, Stock Down on Bleak Q1 View
Cisco Systems CSCO reported fourth-quarter fiscal 2020 non-GAAP earnings of 80 cents per share that beat the Zacks Consensus Estimate by 8.1%. However, the bottom line declined 4% year over year. (Read More)
Southwestern to Buy Montage Resources: What You Need to Know
Southwestern Energy Company SWN recently agreed to acquire a smaller natural gas producer, Montage Resources Corporation MR, in an all-stock deal. The deal is expected to boost Southwestern’s Appalachian Basin footprint with high-return Marcellus and Utica assets. (Read More)
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
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