| | | Apple and Microsoft led growth-oriented advance
03-Aug-20 16:10 ET
Dow +236.08 at 26664.40, Nasdaq +157.52 at 10902.87, S&P +23.49 at 3294.61
briefing.com
[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+1.5%), and Dow Jones Industrial Average (+0.9%) closed higher on Monday, as Apple (AAPL 435.75, +10.71, +2.5%) and Microsoft (MSFT 216.54, +11.53, +5.6%) plowed ahead with noticeable gains. It was another record close for the Nasdaq, while the Russell 2000 outperformed with a 1.8% gain.
Microsoft rallied on news that it was continuing talks to acquire TikTok while Apple remained hot following its 10.5% earnings-driven gain from Friday. Essentially, today was a growth-oriented trade that also saw the Philadelphia Semiconductor Index rise 1.9% and the iShares NASDAQ Biotechnology ETF (IBB 138.57, +4.20) rise 3.1%.
Consequently, the information technology (+2.5%) and health care (+1.1%) sectors finished atop the sector standings, while the defensive-oriented real estate (-1.5%) and utilities (-1.1%) sectors closed lower by more than 1.0%.
Within the health care space, Goldman Sachs upgraded Merck (MRK 82.56, +2.32, +2.9%) to Buy from Neutral, Eli Lilly (LLY 152.84, +2.55, +1.7%) started a Phase 3 trial for the prevention of COVID-19 at long-term care facilities, and Varian Medical (VAR 174.11, +31.39, +22.0%) agreed to be acquired by Siemens Healthineers for $16.4 billion, or $177.50/share, in cash.
In other deal-making news, Marathon Petroleum (MPC 38.57, +0.37, +1.0%) agreed to sell its Speedway business to 7-Eleven for $21 billion in cash. ADT (ADT 13.48, +4.87, +56.6%) partnered with Alphabet's (GOOG 1474.45, -8.51, -0.6%) Google to develop a next generation smart home and security system. Google will take a 6.6% stake in ADT.
Separately, manufacturing conditions continued to improve, as the ISM Manufacturing Index for July increased to 54.2% (Briefing.com consensus 53.4%) from 52.6% in June. In Washington, lawmakers continued to negotiate the next coronavirus relief bill but did not reach an agreement on Monday.
U.S. Treasuries ended the session slightly lower. The 2-yr yield increased one basis point to 0.11%, and the 10-yr yield increased two basis points to 0.56%. The U.S. Dollar Index advanced 0.3% to 93.60. WTI crude futures rose 1.8%, or $0.72, to $41.02/bbl.
Reviewing Monday's economic data:
- The ISM Manufacturing Index for July increased to 54.2% (Briefing.com consensus 53.4%) from 52.6% in June. This was the second straight month the index has been above 50.0% (the demarcation level between expansion and contraction) after cratering to a low of 41.5% in April (the lowest since April 2009).
- The key takeaway from the report rests in the understanding that manufacturing conditions are rebounding from the abyss of three straight monthly contractions (March-May). To be sure, manufacturing conditions were better in July than they were in prior months, but it is still a stretch to say that manufacturing activity is robust since uncertainty about the demand outlook remains high.
- Total construction spending declined 0.7% m/m in June (Briefing.com consensus +1.3%) on the heels of an upwardly revised 1.7% decline (from -2.1%) in May. Total private construction spending was down 0.7% and total public construction spending was also down 0.7%.
- The key takeaway from the report is that total construction spending was up 0.1% yr/yr despite the adverse effects of the pandemic, bolstered by the strength of nonresidential public construction spending (+5.7% yr/yr).
Looking ahead, investors will receive Factory Orders for June on Tuesday.
- Nasdaq Composite +21.5% YTD
- S&P 500 +2.0% YTD
- Dow Jones Industrial Average -6.6% YTD
- Russell 2000 -9.7% YTD
Market Snapshot
| Dow | 26664.40 | +236.08 | (0.89%) | | Nasdaq | 10902.87 | +157.52 | (1.47%) | | SP 500 | 3294.61 | +23.49 | (0.72%) | | 10-yr Note | -2/32 | 0.550 |
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| | NYSE | Adv 1868 | Dec 1080 | Vol 871.5 bln | | Nasdaq | Adv 2314 | Dec 925 | Vol 4.1 bln |
Industry Watch
| Strong: Information Technology, Health Care, Financials |
| | Weak: Utilities, Real Estate, Consumer Staples, Energy |
Moving the Market
-- Apple (AAPL) and Microsoft (MSFT) lead market higher
-- Semiconductor and biotech stocks also outperform in growth-oriented trade
-- ISM Manufacturing Index for July improves to 54.2 (Briefing.com consensus 53.4) from 52.6 in June
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WTI crude futures gain nearly 2%
03-Aug-20 15:25 ET
Dow +249.49 at 26677.81, Nasdaq +158.16 at 10903.51, S&P +26.29 at 3297.41
[BRIEFING.COM] The S&P 500 is up 0.8%, while the Russell 2000 continues to outperform with a 1.8% gain. CNBC recently reported that coronavirus relief bill negotiations are done for the day; lawmakers will continue tomorrow.
One last look at the S&P 500 sectors shows information technology (+2.4%) and health care (+1.1%) still leading in gains, while the real estate (-1.3%) and utilities (-1.1%) sectors remain down more than 1.0%.
WTI crude futures settled higher by 1.8%, or $0.72, to $41.02/bbl. |
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