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Stock Market News for Aug 7, 2020

U.S. stock markets maintained rally on Thursday on expectations of the second round of coronavirus relief package from the government soon. Gradual reopening of the U.S. economy also boosted investors' sentiment. Market participants also rejoiced better-than-expected economic data. All three major stock indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) finished in a positive note for five successive days after gaining 0.7% or 185.46 points to close at 27,386.98. Notably, 15 components of the 30-stock blue-chip index ended in the green while 13 finished in red and two remained unchanged.

The tech-laden Nasdaq Composite ended in positive territory for seven consecutive days to close at 11,108.07, surging 1% or 109.67 points. This marked the first-ever closing above 11,000 for the tech-heavy index while in intraday trading, Nasdaq Composite attained a fresh all-time high at 11,121.19. This reflected the 32nd all-time highs achieved by the index so far this year.

Meanwhile, the S&P 500 advanced 0.6% to end at 3,349.16. This marked the five-day winning streak of the broad-market index. The Communication Services Select Sector SPDR (XLC) and the Technology Select Sector SPDR (XLK) climbed 2.6% and 1.4%, respectively.  Notably, six out of eleven sectors of the benchmark index closed in positive territory while five in negative territory.

The fear-gauge CBOE Volatility Index (VIX) was down 1.5% to 22.65. A total of 9.69 billion shares were traded on Thursday, lower than the last 20-session average of 10.39 billion. Advancers outnumbered decliners on the NYSE by a 1.06-to-1 ratio. On Nasdaq, a 1.15-to-1 ratio favored declining issues.

Expectations on More Fiscal Stimulus

On Aug 6, both Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi said they remained optimistic on an agreement as soon as possible. Meanwhile, both Democrats and Republicans have agreed on another round of $1,200 payments to support households. Moreover, some economists and financial experts remained optimistic that the actual size of the next stimulus package could be well above $1.5 trillion.

Reopening of the Economy

In a major development, after a meeting with the U.S. Centers for Disease Control and Prevention, the Department of State lifted the Global Level 4 Health Advisory. The advisory was introduced on Mar 19 urging U.S. citizens to avoid all international travel due to the global impact of COVID-19. Meanwhile, President Donald Trump has agreed to provide another $25 billion of fiscal stimulus to the sagging airlines industry. 

Consequently, shares of major airlines like American Airlines Group Inc. AAL, United Airlines Holdings Inc. UAL and Delta Air Lines Inc. DAL climbed 3.8%, 2% ans 2.3%, respectively. Both American Airlines and United Airlines carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Department of Labor reported that weekly jobless claims came in at 1.186 million for the week ended Aug 1 compared with an upwardly revised 1.435 million from the previous week. The consensus estimate was 1.428 million. This marked the lowest level of initial claims since the pandemic begins. However, for last 20 straight week, initial claims stayed above 1 million.

Moreover, continuing claims, those who have collected benefits for two straight weeks, dropped by 844,000 to 16.1 million. The four-week moving average of jobless claims, which excludes volatility, declined 413,250 to 16.6 million.

Stocks That Made Headline

Uber Q2 Loss Wider Than Expected, Revenues Drop 29%

Uber Technologies Inc. UBER incurred a loss of $1.02 per share, wider than the Zacks Consensus Estimate of a loss of $0.78. (Read More)

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