Benchmarks closed in the positive territory on Tuesday as investors overlooked possibilities of new rounds of coronavirus lockdowns in Europe and political uncertainties in the United States.
The Dow Jones Industrial Average (DJI) rose 140.48 points, or 0.5%, to close at 27,288.18 and the S&P 500 edged up 34.51 points or 1.1% to close at 3,315.57. The Nasdaq Composite Index closed at 10,963.64, adding 184.84 points, or 1.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.3%, to close at 26.86. Advancing issues outnumbered declining ones for 1.12-to-1 ratio on the NYSE and a 1.14-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
The S&P 500 and the Nasdaq ended their four-day losing streaks, while the Dow snapped a three-day losing streak on Tuesday. The Nasdaq was boosted by a 5.7% and 6.1% rise in shares of Amazon.com, Inc. (AMZN - Free Report) and Lululemon Athletica Inc. (LULU - Free Report) . Shares of Facebook, Inc. (FB - Free Report) Alphabet Inc. (GOOGL - Free Report) and Microsoft Corporation (MSFT - Free Report) closed at least 2% higher for the session.
Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the 11 major sectors of the S&P 500, seven ended in the green led by a nearly 3% gain in the consumer discretionary sector, followed by at least 1.7% rise in communication service and technology sectors.
Overall, the S&P 500 posted one new 52-week high and no new lows, while the Nasdaq Composite recorded 25 new highs and 48 new lows.
UK Imposes New Restrictions to Curb COVID-19 Spread
On Tuesday, investors kept a close watch on rising coronavirus cases in Europe and measures taken by government to curb the spread. The country recorded 4,926 new cases yesterday which is the highest daily figure since early May. U.K. Prime Minister Boris Johnson introduced new restrictions to stem the spread of the coronavirus outbreak that includes curfews for pubs and restaurants from 10 p.m. to 5 p.m. and stricter measures on wearing face masks.
The new rules are to be applicable for the next six months and include fines and may also lead to closure for businesses that do not meet COVID-secure guidelines. All restaurant and bar staff, retail workers, and people in taxis failing to wear a mask will be fined 200 pounds. While, businesses failing to abide by new guidelines will face fines of 10,000 pound and could be closed.
Growing Political Uncertainty May Extend Market Volatility
While President Donald Trump rush to nominate a successor to Supreme Court Justice Ruth Bader Ginsburg who died on Sep 18, the prospects of new fiscal stimulus is becoming bleak. As the U.S. House of Representatives are unwilling to compromise, members of Congress have been pressing the Federal Reserve to do more.
On Tuesday, Fed Chairman Jerome Powell said, if the Congress is worried about the health of some American businesses, it’s up to lawmakers to provide support directly. Powell also said that the Fed’s Main Street Lending Program that makes loans available to smaller companies had little demand for loans below $1 million. He believes that for some companies a loan that could be difficult to repay might not be the solution, and in such cases a direct fiscal support may be needed.
Existing Home Sales Surge in August
On Tuesday, the National Association of Realtors reported that existing home sales increased for the third consecutive month in August. Total existing-home sales rose 2.4% in August to a seasonally-adjusted annual rate of 6 million from July’s 5.86 million. However, the figure lags the consensus estimate of 6.05 million. Home sales grew at the fastest pace since December 2006 and the figures are up 10.5% compared to a year ago.
Additionally, the Northeast region recorded the biggest jump in sales with a 13.8% increase in August. Along with sales, median existing-home price has also edged up, witnessing a 11.4% rise in August to $310,600 from a year ago.
5 Stocks Set to Double
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