Nasdaq closes at new record in bullish start to the week
06-Jul-20 16:20 ET
Dow +459.67 at 26287.05, Nasdaq +226.02 at 10433.65, S&P +49.71 at 3179.59
[BRIEFING.COM] The S&P 500 rose 1.6% on Monday in a bullish start to the week, but it was the Nasdaq Composite (+2.2%) and Dow Jones Industrial Average (+1.8%) that gained the advantage today. The Nasdaq closed at another record high, while the Russell 2000 underperformed the large-cap indices with a 0.8% gain.
Ten of the 11 S&P 500 sectors finished in positive territory, including the consumer discretionary (+3.2%), communication services (+2.2%), financials (+2.0%), and information technology (+1.8%) sectors atop the standings. The utilities sector (-1.3%) was the lone holdout with a 1.3% decline.
The positive bias was ignited overseas when a front-page editorial in one of China's state-run news outlets implied that a "healthy bull market" was imminent. China's Shanghai Composite surged 5.7% on Monday. The U.S. stock market saw a noticeable bump after the ISM Non-Manufacturing Index for June returned to expansionary territory with a 57.1% reading (Briefing.com consensus 49.0%).
It was largely a momentum trade rooted in recovery optimism and a fear of missing out, but the market drifted mostly sideways after the ISM report, which was released at 10:00 a.m. ET. The market was supported heavily by mega-cap, and momentum, stocks, including Amazon (AMZN 3057.04, +166.74, +5.8%) and Tesla (TSLA 1371.58, +162.92, +13.5%).
In the energy space, Dominion Energy (D 73.59, -9.10) shares fell 11.0% following a pair of noteworthy actions. The company agreed sell its natural gas assets to Berkshire Hathaway (BRK.B 182.72, +3.89, +2.2%) for $4 billion in cash, which will also assume $5.7 billion in debt, and announced the cancellation of the Atlantic Coast Pipeline that was jointly owned by Duke Energy (DUK 79.81, -2.03, -2.5%).
This was Warren Buffet's first major deal during the pandemic, but it wasn't as alluring as Uber (UBER 32.52, +1.84, +6.0%) agreeing to acquire Postmates for $2.65 billion.
Headlines about the daily record in new coronavirus cases in the U.S. remained in the news, but the market remained steadfast in the view that a growing cooperation in mask-wearing and increased testing would slow the outbreak. On a related note, Regeneron Pharma (REGN 627.25, +4.80, +0.8%) said it started a Phase 3 trial for its COVID-19 antibody treatment.
U.S. Treasuries finished slightly lower in a tight-ranged session. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield increased two basis points to 0.68%. The U.S. Dollar Index declined 0.4% to 96.75. WTI crude declined 0.2% to $40.51/bbl.
Reviewing Monday's economic data:
The ISM Non-Manufacturing Index for June increased to 57.1% (Briefing.com consensus 49.0%) from 45.4% in May. A reading above 50.0% connotes an expansion in activity. June represented the first month of expanding activity since March.
Survey responses reflect changes, if any, in the current month compared to the previous month. The key takeaway, then, is that the June report can't be taken at face value as a "strong" report so much as it can be taken as a report showing stronger activity relative to the depressed activity in May.
Looking ahead, investors will receive the JOLTS - Job Openings report for May on Tuesday.
Nasdaq Composite +16.3% YTD
S&P 500 -1.6% YTD
Dow Jones Industrial Average -7.9% YTD
Russell 2000 -13.5% YTD
Market Snapshot
Dow 26287.05 +459.67 (1.78%)
Nasdaq 10433.65 +226.02 (2.21%)
SP 500 3179.59 +49.71 (1.59%)
10-yr Note -1/32 0.680
NYSE Adv 2057 Dec 899 Vol 1.1 bln
Nasdaq Adv 2188 Dec 1170 Vol 4.5 bln
Industry Watch
Strong: Communication Services, Consumer Discretionary, Information Technology, Financials
Weak: Utilities, Energy
Moving the Market
-- Tech stocks driving Nasdaq to new records
-- Chinese state media suggested fostering a bull market should be a priority for the Chinese economy
-- ISM Non-Manufacturing Index for June returns into expansionary territory
-- M&A activity
WTI crude ticks lower while stocks gain
06-Jul-20 15:25 ET
Dow +363.92 at 26191.30, Nasdaq +201.26 at 10408.89, S&P +40.53 at 3170.41
[BRIEFING.COM] The S&P 500 is up 1.3% as it continues to drift sideways.
One last look at the S&P 500 sectors shows consumer discretionary (+2.7%), financials (+1.9%), communication services (+1.8%), and information technology (+1.6%) continuing to outperform the benchmark index. The utilities sector (-1.6%) remains an eyesore with a decline nearing 2%.
WTI crude futures decreased $0.07 (-0.2%) to $40.51/bbl.
