Stocks gain to end the week
10-Jul-20 16:20 ET
Dow +369.21 at 26075.30, Nasdaq +69.69 at 10617.44, S&P +32.99 at 3185.04
briefing.com
[BRIEFING.COM] The S&P 500 advanced 1.1% on Friday, as investors rotated back into growth/value stocks following a positive remdesivir update. The Dow Jones Industrial Average (+1.4%) and Russell 2000 (+1.7%) pulled ahead, while the Nasdaq Composite (+0.7%) underperformed but still closed at a record high.
Prior to the open, Gilead Sciences (GILD 76.32, +1.61, +2.2%) said new remdesivir data showed an improvement in clinical recovery for severely-ill COVID-19 patients and a 62% reduction in the risk of mortality compared to the standard of care. The news turned equity index futures positive and caused a rotational trade back into economically-sensitive stocks after the open.
The S&P 500 financials (+3.5%) and energy (+3.3%) sectors rose more than 3.0% amid expectations that these beaten-up sectors would outperform in a recovery. The health care sector (-0.2%) ironically closed lower while the information technology sector (unch) took a breather.
A steady advance gathered momentum late in the day as many of the mega-cap technology stocks turned positive after a sluggish start. The momentum was strong with Tesla (TSLA 1544.65, +150.37, +10.8%), while Netflix (NFLX 548.73, +40.97, +8.1%) and Amazon (AMZN 3200.00, +17.37, +0.6%) benefited from price target increases at brokerage firms.
Carnival (CCL 16.16, +1.58, +10.8%) shares received an additional boost after the company noted an increase in demand for new bookings in 2021, feeding the reopening trade and outweighing its mixed earnings results.
U.S. Treasuries backed off from early morning highs following the remdesivir update, sending yields higher. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield increased three basis points to 0.63% after touching 0.57% in overnight action. The U.S. Dollar Index declined 0.1% to 96.63. WTI crude rose 2.1%, or $0.94, to $40.57/bbl.
Reviewing Friday's economic data:
- The Producer Price Index for final demand, led by a 0.3% decline in prices for final demand services, decreased 0.2% m/m (Briefing.com consensus +0.4%) following a 0.4% increase in May. Excluding food and energy, the index for final demand decreased 0.3% m/m (Briefing.com consensus +0.1%) after declining 0.1% in May.
- The key takeaway from the report is that there are few, if any, inflation pressures at the producer level due to generally weak demand.
Looking ahead, investors will not receive any economic data on Monday, but many health care and financial companies will report earnings next week.
- Nasdaq Composite +18.3% YTD
- S&P 500 -1.4% YTD
- Dow Jones Industrial Average -8.6% YTD
- Russell 2000 -14.7% YTD
Market Snapshot
| Dow | 26075.30 | +369.21 | (1.44%) | | Nasdaq | 10617.44 | +69.69 | (0.66%) | | SP 500 | 3185.04 | +32.99 | (1.05%) | | 10-yr Note | -25/32 | 0.641 |
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| | NYSE | Adv 2237 | Dec 703 | Vol 875.8 mln | | Nasdaq | Adv 1997 | Dec 1193 | Vol 3.5 bln |
Industry Watch
| Strong: Financials, Energy, Communication Services, Utilities, Consumer Staples |
| | Weak: Information Technology, Health Care, Real Estate |
Moving the Market
-- Cyclical and value stocks lead market higher to end the week
-- Gilead Sciences (GILD) released new data on remdesivir showing an improvement in clinical recovery for patients with COVID-19
-- Relative weakness in the information technology and health care sectors
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WTI crude futures gain amid reopening trade
10-Jul-20 15:25 ET
Dow +348.44 at 26054.53, Nasdaq +52.11 at 10599.86, S&P +29.57 at 3181.62
[BRIEFING.COM] The S&P 500 is now trading higher by 0.9%, as most mega-cap technology stocks turn positive.
One last look at the S&P 500 sectors shows financials (+3.3%) out in the lead with a 3.3% gain, followed by energy (+2.6%) and utilities (+2.1%). The health care (-0.2%) and information technology (-0.2) sectors still trade lower.
WTI crude futures settled the session higher by $0.94 (+2.4%) to $40.57/bbl. For the week, crude futures were up just 0.4%. |
