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Stock Market News for Jun 23, 2021

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U.S. stocks closed higher for the second consecutive session on Tuesday, as Nasdaq finished at a record high after bitcoin prices made an intraday comeback and investors focused on growth stocks. Also, Fed Chair Jerome Powel reassured that the central bank will aim for a "broad and inclusive" job market recovery and won’t look at increasing interest rates sooner than expected. All the three major indexes ended in the positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.2% or 68.61 points to finish at 33,945.58 points, after recording its best single-day percentage gain since Mar 5 on Monday.

The S&P 500 climbed 0.5% or 21.65 points to end at 4,246.44 points, falling just short of a new closing record. The rally was led by tech and consumer discretionary stocks.

The Technology Select Sector SPDR (XLK) and Consumer Discretionary Select Sector SPDR (XLF) each gained 0.9%. Nine of the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq advanced 0.8% or 111.79 points to end at 14,253.27 points, closing at a new record high.  Shares of Facebook, Inc. gained 2%, while Apple, Inc. (AAPL - Free Report) advanced 1.3%%. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 6.88% to 16.66. A total of 9.5billion shares were traded on Tuesday, lower than the last 20-session average of 11.1 billion. Advancers outnumbered decliners on the NYSE by a 1.26-to-1 ratio. On Nasdaq, a 1.08-to-1 ratio favored advancing issues.

Investors’ Sentiment Get a Boost

Stocks bounced back on Monday after a volatile last week. On Tuesday, investors’ confidence got a further boost after Powell assured that interest rates won’t be raised sooner than expected. Powell, who testified before the House select subcommittee on the coronavirus pandemic, reaffirmed that the Fed would take a cautious step and be patient while scaling back lose its monetary policy.

Powell also said that the central bank’s intent is to encourage a “broad and inclusive” job market recovery and that the idea is not to increase interest rates too quickly based on fears of rising inflation. He also sounded confident about the economic recovery and said that inflation forces were temporary.

Following his remarks, financial market somewhat calmed down as investors shed fears of runaway inflation and a sooner-than-expected rollback of the stimulus. This sent stocks on a rally, with investors shifting focus on growth stocks once again.

Tech Stocks Rally

Tech stocks rallied once again on Tuesday, driving the markets, as Powell’s remarks made investors shift focus toward growth stocks. Also, falling bitcoin price over the past couple of days due to China’s crackdown on cryptocurrency mining, had somewhat been hurting tech stocks. On Tuesday, bitcoin once again had a wild session, with price falling below the $30,000 mark but it staged a comeback and finished the day in green. So much so that at one point of the day bitcoin wiped out all its gains for 2021. However, it staged a comeback sending stocks on a rally. 

Economic Data

In economic data released on Tuesday, the National Association of Realtors said that existing homes sales declined 0.9% in May to a seasonally adjusted annual rate of 5.8 million units. However, on a year-over-year basis existing home sales were up almost 45%.

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