Mega-caps power Nasdaq to new record
20-Aug-20 16:20 ET
Dow +46.85 at 27739.73, Nasdaq +118.49 at 11265.03, S&P +10.66 at 3385.51
briefing.com
[BRIEFING.COM] The large-cap indices closed higher on Thursday, as the upwards momentum in the mega-caps overshadowed any underlying weakness in the market. The Nasdaq Composite rallied 1.1% for another record close, while the S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.2%) posted smaller gains. The Russell 2000 declined 0.5%.
The session did start on a lower note after weekly initial claims increased by 135,000 to 1.106 million (Briefing.com consensus 990,000), which fueled recovery concerns amid stalled negotiations surrounding the next coronavirus relief bill. That might have explained the clear advantage declining issues had over advancing issues at the NYSE and Nasdaq.
Overall price action, though, has become more intertwined with the constantly growing mega-cap stocks: Apple (AAPL 473.10, +10.27, +2.2%), Microsoft (MSFT 214.58, +4.88, +2.3%), Amazon (AMZN 3297.37, +36.89, +1.1%), Alphabet (GOOG 1581.75, +34.22, +2.2%), and Facebook (FB 269.01, +6.42, +2.4%), which have thrived in the precarious environment.
The big gains in these stocks today carried the information technology (+1.4%), communication services (+1.4%), and consumer discretionary (+0.1%) sectors into positive territory, and the real estate sector (+1.1%) also showed strength after underperforming yesterday.
These were the only sectors that finished higher. The energy sector fell 2.1%, but no other sector lost more than 1.0%.
Separately, Uber (UBER 31.41, +1.99, +6.8%) and Lyft (LYFT 29.76, +1.62, +5.8%) were granted a reprieve in their disputes over driver classification in California, sending shares of both companies higher by 6%. LYFT was down as much as 8.5% after the company previously announced plans to suspend California operations at midnight.
In other corporate news, Intel (INTC 49.17, +0.84, +1.7%) announced a $10 billion accelerate stock repurchase program, NVIDIA (NVDA 485.64, +0.10, unch) reported positive earnings results and upbeat revenue guidance, and Estee Lauder (EL 198.27, -14.23, -6.7%) disappointed investors with its earnings report.
U.S. Treasuries finished the day with modest gains. The 2-yr yield declined two basis points to 0.12%, and the 10-yr yield declined three basis points to 0.64%. The U.S. Dollar Index declined 0.2% to 92.74. WTI crude futures declined 0.6%, or $0.27, to $42.62/bbl.
Reviewing Thursday's economic data:
- Initial claims for the week ending August 15 increased by 135,000 to 1.106 million (Briefing.com consensus 990,000). Continuing claims for the week ending August 8 decreased by 636,000 to 14.844 million.
- The key takeaway from the report is that it covered the week in which the survey is conducted for the August Employment Situation Report. The jump in initial claims above 1.1 million is going to temper economists' expectations for gains in August nonfarm payrolls.
- The Conference Board's Leading Economic Index (LEI) increased 1.4% m/m in July (Briefing.com consensus 1.1%) on the heels of an upwardly revised 3.0% increase (from 2.0%) in June. This was the third straight monthly increase for the index following three straight monthly declines for the February-April period.
- The key takeaway from the report is that, despite three straight monthly increases, the July index level of 104.4 remains 6.6% below the 111.8 level seen in February (i.e. the pre-COVID shutdown phase).
- The Philadelphia Fed Index decreased to 17.2 in August (Briefing.com consensus 21.0) from 24.1 in July.
Looking ahead, investors will receive Existing Home Sales for July on Friday.
- Nasdaq Composite +26.6% YTD
- S&P 500 +4.8% YTD
- Dow Jones Industrial Average -2.8% YTD
- Russell 2000 -6.2% YTD
Market Snapshot
| Dow | 27739.73 | +46.85 | (0.17%) | | Nasdaq | 11265.03 | +118.49 | (1.06%) | | SP 500 | 3385.51 | +10.66 | (0.32%) | | 10-yr Note | +3/32 | 0.652 |
|
| | NYSE | Adv 1198 | Dec 1761 | Vol 706.9 mln | | Nasdaq | Adv 1301 | Dec 1967 | Vol 4.1 bln |
Industry Watch
| Strong: Information Technology, Real Estate, Communication Services, Consumer Discretionary |
| | Weak: Energy, Financials, Utilities, Materials |
Moving the Market
-- Mega-cap stocks outperform, while cyclical sectors lag
-- Weekly initial claims increased by 135,000 to 1.106 million (Briefing.com consensus 990,000
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WTI crude settles modestly lower
20-Aug-20 15:25 ET
Dow +16.65 at 27709.53, Nasdaq +104.00 at 11250.54, S&P +7.41 at 3382.26
[BRIEFING.COM] The S&P 500 is up 0.2%, while the Nasdaq widens its advantage with a 0.9% gain.
One last look at the S&P 500 sectors shows information technology (+1.3%), communication services (+1.1%), real estate (+1.1%), and consumer discretionary (+0.2%) still trading in the green, while the energy (-1.7%), financials (-1.0%), and utilities (-0.9%) sectors lag in negative territory.
WTI crude futures settled lower by 0.6%, or $0.27, to $42.62/bbl. |
