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Both the S&P 500 and Nasdaq Composite gained on Monday buoyed by strong performance of financials and technology sectors. A spike in the yield of U.S. government bonds boosted financial stocks while technology stocks benefitted from investor’s anticipation of robust second-quarter earnings. However, the Dow 30 declined marginally as concerns about an impending global trade war and geopolitical conflicts dented investor’s confidence.
The Dow Jones Industrial Average (DJI) closed at 25,044.29, decreasing 0.1%. However, the S&P 500 Index (INX) gained 0.2% to close at 2,806.98. The Nasdaq Composite Index (IXIC) closed at 7,841.87, rising 0.3%. A total of 5.50 billion shares were traded on Monday, lower than the last 20-session average of 6.16 billion shares. Decliners outnumbered advancers on the NYSE by 1.38-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.06-to-1 ratio. The CBOE VIX decreased 1.9% to close at 12.62.
How Did the Benchmarks Perform?
The Dow was down 0.1% reflecting its third straight loss. This marked the blue-chip index’s longest losing streak in July and its biggest losing run since the eight-session decline ended Jun 21. Notably, 16 components of the 30-stock index closed in the red, 13 traded in the green while 1 remained unchanged.
The S&P 500 increased 0.2% led by 1.3% gain in Financials Select Sector SPDR (XLF), 0.5% rise in Technology Select Sector SPDR (XLK) and 0.4% increase in Communication Services Select Sector SPDR (XLC). However, only four out of 11 sectors of the benchmark index ended in positive territory.
The Nasdaq Composite advanced 0.3% due to strong performance of large-cap technology and financial stocks.
Higher Bond Yields Lifts Financial Stocks
The yield on benchmark 10-year US Treasury Note was up 6.8 basis points to 2.963%. This represents its highest close in six weeks as well as its largest one-day rate jump since Jun 1. Spike in US government bond yield was primarily due to two reasons.
First, The Japanese 10-year bond yield surged more than 4.3% to 0.83% from 0.32% on Monday following news that that the Bank of Japan is likely to adjust its monetary policy of interest-rate targeting and stock-buying techniques. The surge in bond yield reflects its largest one-day yield move in about two years.
Second, President Donald Trump’s recent statement that he disagrees with the Fed’s policy of pursuing gradual rate hike also resulted in soaring government bond yields. Trump’s view is that higher interest rate will increase cost of debt servicing and will make U.S. dollar more expensive, thus hurting U.S. exporters. Both of these factors will undermine positive effects of the U.S. government’s fiscal stimulus.
Technology Stocks Gain on Strong Earnings Expectations
Large-cap tech stocks like Alphabet Inc. (GOOGL - Free Report) and Facebook Inc. rose 1.1% and 0.5%, respectively. A series of tech behemoths will report their quarterly earnings results this week. Investors’ expectations are mounting up for those companies. Notably, Technology Select Sector SPDR (XLK) is the best performing sector of S&P 500 so far this year providing a year-to-date return of 14%.
Economic Data
The National Association of Realtors reported that existing home sales fell 0.6% to a seasonally adjusted annual rate of 5.38 million units in June, missing the consensus estimate of 5.44 million. The metric fell for a third straight month in June. Moreover, May’s existing home sales was revised downward to 5.41 million from previously reported 5.43 million.
Whirlpool Corp. (WHR - Free Report) reported dismal second-quarter 2018 results as both earnings and sales missed estimates. (Read More)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Stock Market News For Jul 24, 2018
Both the S&P 500 and Nasdaq Composite gained on Monday buoyed by strong performance of financials and technology sectors. A spike in the yield of U.S. government bonds boosted financial stocks while technology stocks benefitted from investor’s anticipation of robust second-quarter earnings. However, the Dow 30 declined marginally as concerns about an impending global trade war and geopolitical conflicts dented investor’s confidence.
The Dow Jones Industrial Average (DJI) closed at 25,044.29, decreasing 0.1%. However, the S&P 500 Index (INX) gained 0.2% to close at 2,806.98. The Nasdaq Composite Index (IXIC) closed at 7,841.87, rising 0.3%. A total of 5.50 billion shares were traded on Monday, lower than the last 20-session average of 6.16 billion shares. Decliners outnumbered advancers on the NYSE by 1.38-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.06-to-1 ratio. The CBOE VIX decreased 1.9% to close at 12.62.
How Did the Benchmarks Perform?
The Dow was down 0.1% reflecting its third straight loss. This marked the blue-chip index’s longest losing streak in July and its biggest losing run since the eight-session decline ended Jun 21. Notably, 16 components of the 30-stock index closed in the red, 13 traded in the green while 1 remained unchanged.
The S&P 500 increased 0.2% led by 1.3% gain in Financials Select Sector SPDR (XLF), 0.5% rise in Technology Select Sector SPDR (XLK) and 0.4% increase in Communication Services Select Sector SPDR (XLC). However, only four out of 11 sectors of the benchmark index ended in positive territory.
The Nasdaq Composite advanced 0.3% due to strong performance of large-cap technology and financial stocks.
Higher Bond Yields Lifts Financial Stocks
The yield on benchmark 10-year US Treasury Note was up 6.8 basis points to 2.963%. This represents its highest close in six weeks as well as its largest one-day rate jump since Jun 1. Spike in US government bond yield was primarily due to two reasons.
First, The Japanese 10-year bond yield surged more than 4.3% to 0.83% from 0.32% on Monday following news that that the Bank of Japan is likely to adjust its monetary policy of interest-rate targeting and stock-buying techniques. The surge in bond yield reflects its largest one-day yield move in about two years.
Second, President Donald Trump’s recent statement that he disagrees with the Fed’s policy of pursuing gradual rate hike also resulted in soaring government bond yields. Trump’s view is that higher interest rate will increase cost of debt servicing and will make U.S. dollar more expensive, thus hurting U.S. exporters. Both of these factors will undermine positive effects of the U.S. government’s fiscal stimulus.
Consequently, share price of large banking stocks such as JPMorgan Chase & Co. (JPM - Free Report) and Citigroup Inc. (C - Free Report) rose 1.9% and 1.4%, respectively. Both JPMorgan Chase and Citigroup carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Technology Stocks Gain on Strong Earnings Expectations
Large-cap tech stocks like Alphabet Inc. (GOOGL - Free Report) and Facebook Inc. rose 1.1% and 0.5%, respectively. A series of tech behemoths will report their quarterly earnings results this week. Investors’ expectations are mounting up for those companies. Notably, Technology Select Sector SPDR (XLK) is the best performing sector of S&P 500 so far this year providing a year-to-date return of 14%.
Economic Data
The National Association of Realtors reported that existing home sales fell 0.6% to a seasonally adjusted annual rate of 5.38 million units in June, missing the consensus estimate of 5.44 million. The metric fell for a third straight month in June. Moreover, May’s existing home sales was revised downward to 5.41 million from previously reported 5.43 million.
Stocks That Made Headlines
Whirlpool Falls on Q2 Earnings & Sales Miss, View Cut
Whirlpool Corp. (WHR - Free Report) reported dismal second-quarter 2018 results as both earnings and sales missed estimates. (Read More)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>