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Stock Market News for Sep 28, 2020

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U.S. stock markets closed sharply higher on Friday as investors acquired in the dip stocks especially from the technology sector. However, the market remained choppy for four consecutive weeks. All the three major stock indexes ended in the red. For the week as a whole, both the Dow and the S&P 500 finished in negative territory while the Nasdaq Composite ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 1.3% or 358.52 points to close at 27,173.96, maintaining 2-day winning streak. Notably, 25 components of the 30-stock index ended in the green while 5 finished in red. The blue-chip index is 2.8% below to become green year to date.

Moreover, the tech-laden Nasdaq Composite finished at 10,913.56, appreciating 2.3% or 241.30 points due to the strong showing by technology behemoths, continuing two-day winning run.

Meanwhile, the S&P 500 advanced 1.6% to end at 3,298.46, marking second successive day of gain. The Real Estate Select Sector SPDR (XLRE), the Technology Select Sector SPDR (XLK) and the Utilities Select Sector SPDR (XLU) climbed 1.9%, 2.4% and 1.6%, respectively. Notably, ten out of the eleven sectors of the benchmark index closed in positive territory and one in negative zone.

The fear-gauge CBOE Volatility Index (VIX) was down 7.5% to 26.38. A total of 8.89 billion shares were traded on Friday, lower than the last 20-session average of 9.47 billion. Advancers outnumbered decliners on the NYSE by a 2.30-to-1 ratio. On Nasdaq, a 2.94-to-1 ratio favored advancing issues.

Technology Continues to Rebound

Technology sector witnessed its best single-day performance since Sep 9, as market participants have started buying in the dip stocks. The technology sector pulled down the overall market in September after being the predominant driver of the impressive showing over the last five months. However, in the due course of the market's V-shaped recovery, technology stocks got overvalued, as stated by many financial experts.

Month to date, the technology sector is down 7.6%. The large-cap technology stocks faced the brunt of recent market meltdown. These stocks are currently available at attractive valuations, which compelled investors to buy technology bigwigs.

Consequently shares of Apple Inc. (AAPL - Free Report) , Inc. (AMZN - Free Report) , Facebook Inc. (FB - Free Report) , Microsoft Corp. (MSFT - Free Report) and Netflix Inc. (NFLX - Free Report) surged 3.8%, 2.5%, 2.1%, 2.3% and 2.1%, respectively. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

Durable goods orders increased 0.4% in August, marking its fourth consecutive months of rise. However, the figure lagged the consensus estimate of 1.3%. Notably, July's data was revised upward from an increase of 11.2% to 11.7%. The metric for August clearly indicates that the U.S. economic turnaround from the pandemic has slowed in last month.

The core Capital goods (excluding defense and aircraft) orders rose 1.8% in August compared with 2.5% in July. However, data for August was above the pre-pandemic level. Shipments of this category increased 1.5% in last month.

Weekly Roundup

Last week was a mixed one for Wall Street. The Dow and the S&P 500 were down 1.8% and 0.6%, respectively. Both these indexes ended in negative zone for four weeks in a row. This happened for the first time since August 2019. However, the Nasdaq Composite gained 1.1%, reversing the three consecutive weeks of decline.

A spike in coronavirus news cases in several countries of Europe and some states in the United States, conflicting news on the availability of COVID-19 vaccine, uncertainty regarding the fresh round of fiscal stimulus from the U.S. government, intensifying geo-political conflict with China and the upcoming U.S. Presidential election are the reasons for market volatility.

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