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Stock Market News for Aug 3, 2021

Benchmarks closed in the red on Monday, giving up early gains as concerns about the spread of the delta variant of the coronavirus spooked investors and overshadowedstrong earnings reports. Investors also eyed on the progress of the infrastructure bill.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 97.31 points, or 0.3 %, to close at 34,838.16, after it touched an intraday high of 35,192.11 on Monday. Dow’s nearly 100 points decline was led by 2.7% decline in shares of Visa Inc. V followed by 1.1% drop in McDonald's Corporation MCD. Both the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 fell 8.10 points, or 0.2%, to end the session at 4,387.16, after hitting the peak at 4,422.18. Of the 11 major sectors of the broader index, seven ended in the red with the materials sector sliding 1.2% for the session accompanied by 0.7% decline in industrials and energy sectors. The utilities sector got a boost from progress on the infrastructure bill and was among the gainers of the broader index, closing 0.8% higher on Monday

The Nasdaq Composite Index closed at 14,681.07, after adding 8.39 points, or 0.06 % and reached an intraday peak of 14,770.41., Inc. AMZN rebounded from its Friday’s steep decline edging up 0.1%. Tesla, Inc. TSLA was the highest gainer, adding 3.3%, followed by more than 2% gain in shares of NetEase, Inc. NTES, Advanced Micro Devices, Inc. AMD and Peloton Interactive, Inc. PTON.

On Monday, the fear-gauge CBOE Volatility Index (VIX) increased 6.7%, to close at 19.46. Declining issues outnumbered advancing ones for 1.07-to-1 ratio on the NYSE, while a 1.05-to-1 ratio on the Nasdaq favored advancers. The S&P 500 posted 76 new 52-week highs and two new lows, while the Nasdaq Composite recorded 98 new highs and 67 new lows. A total of 8.80 billion shares were traded on yesterday, lower than the last 20-session average of 9.77 billion.

Senators Unveiled a $1 Trillion Infrastructure Bill

After much delay, on Aug 1, the senators unveiled a nearly $1 trillion bipartisan infrastructure package. The bill calls for $550 billion in new spending over five years above projected federal levels, with a substantial amount being invested on the nation’s roads, bridges, waterworks, broadband and the electric grid. It is expected to provide $110 billion for roads and bridges, $39 billion for public transit and $66 billion for rail. Along with that $55 billion will be spent on water and wastewater infrastructure.

The infrastructure bill still faces option from a few Republicans, but bipartisan support from Republican and Democratic senators has pushed the process along so far and the voting is expected to be completed before senators leave for the August recess.

ISM Manufacturing Index Remains in Expansion Territory

The Institute for Supply Management (ISM) reported on Monday that its manufacturing index remained in the expansion territory at 59.5 in July, but 1.1 percentage points decrease from the June reading of 60.6. The consensus estimate was of an increase to 60.8, however, the Employment Index improved to 52.9 from 49.9. July’s figure indicates expansion in the overall economy for the 14th month in a row after a contraction in April last year due to the pandemic outbreak.

Construction Spending Edge Up Slightly

The U.S. Census Bureau reported yesterday that construction spending edged up 0.1% in June, at a seasonally adjusted annual rate of $1,552.2 billion. June’s figure is a rebound from May’s 0.3% decline, but lower than the consensus estimate of 0.4% gain. Residential constructions bumped up 1.1% in June, while non-residential construction edged up 0.7%. 

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