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Stock Market News For Jul 10, 2018

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Wall Street witnessed a strong broad-based rally on Monday. All three major indexes closed sharply higher on the first trading day of the week, reflecting three straight sessions of gains.  A series of robust job data diminished investor’s concerns about a full-fledged trade war.

The Dow and S&P 500 recorded their biggest gains in more than a month. Moreover, market participants are looking for a solid second-quarter earnings season which will be kicked off later this week. Financials and industrials sectors took the leading part on Monday’s broad-based stock rally.

The Dow Jones Industrial Average (DJI) closed at 24,776.59, jumped 1.3% or 320.11 points. The S&P 500 Index (INX) increased 0.9% to close at 2,784.17. The Nasdaq Composite Index (IXIC) closed at 7,756.20, gaining 0.9%. A total of 6 billion shares were traded on Monday, lower than the last 20-session average of 7 billion shares. Advancers outnumbered decliners on the NYSE by 1.77-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.65-to-1 ratio.  The CBOE VIX decreased 5.1% to close at 12.69.

How Did the Benchmarks Perform?

The Dow surged 1.3% which helped the blue-chip index to return to positive territory for 2018. Moreover, the index also closed above its 50-day moving average – a psychological barrier for short-term momentum trend – for the first time since Jun 20. Notably, 25 of the 30-stock index closed in the green while 5 traded in the red.

The S&P 500 was up 0.9% led by 2.3% increase in Financials Select Sector SPDR (XLF), 1.9% rise in Industrials Select Sector SPDR (XLI), 1.5% gain in Energy Select Sector SPDR (XLE) and 1.2% rise in Consumer Discretionary Select Sector SPDR (XLY), partially offset by 3.1% decline in Utilities Select Sector SPDR (XLU). Notably, eight out of 11 sectors of the benchmark index ended in positive territory.

Likewise, the tech-heavy Nasdaq Composite gained 0.9% due to strong showing by the large-cap tech stocks.

Financial and Industrial Sectors Lead Market Rally

Financial and industrial stocks rally significantly on Monday, which led to a broad-based market rally. Notably, both financials and industrials sector gained as investor shrugged off trade war fear buoyed by strong economic data. Friday’s job market data reduces concerns that United States is in the late stage of economic expansion.

Moreover, ISM manufacturing and services data for June and Commerce Department’s encouraging data on U.S. trade deficit in May as well as strong consumer credit data for May released by the Fed raised investor’s appetite for riskier assets like equities.

Financial stocks were also benefitted from rising yield on benchmark 10-year Treasury Notes. The yield raised 3.6 basis points to 2.87%. Financials Select Sector SPDR (XLF) witnessed its biggest one-day percentage gain since Jun 6.

Share prices of major banks such as JPMorgan Chase & Co. (JPM - Free Report) , Citigroup Inc. (C - Free Report) , The Goldman Sachs Group Inc. (GS - Free Report) and Bank of America Corp. (BAC - Free Report) increased 3.1%, 2.7%. 2.8% and 3.6%, respectively.

Likewise, share prices of large industrial companies like Caterpillar Inc. (CAT - Free Report) and The Boeing Co. (BA - Free Report) increased 4.1% and 2.2%, respectively. The Boeing sports a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.

Economic Data

The Federal Reserve reported that total consumer credit increased $24.6 billion in May to a seasonally adjusted $3.9 trillion. This reflects a year-over-year growth of 7.6%, the fastest growth rate since November. April’s reading has been revised to $10.3 billion from $9.3 billion reported earlier. April and May data indicate strong consumer spending in the second quarter of 2018.

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